Question: 3 . Marketing research indicates that the average consumer visits a supermarket 2 . 5 times per week. On each visit the average market basket

3. Marketing research indicates that the average consumer visits a supermarket 2.5 times per week. On each visit the average market basket is $45, on which the store earns a 15% margin. Customers are very loyal but there is a churn rate of 10% per year. When discounting cash flows, managers assume the interest rate is 10% per year.
3a. What is the weekly margin obtained from a typical customer? $_____
3b. How long can the store assume that the average customer will stay shopping at its store?
_____ years
3c. What is the total discounted margin obtained over the lifetime of a typical customer?
$_____
3d. What is the minimum number of new customers required to justify a new ad campaign costing $175,000?
_____customers

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