A cable company spends on average $600 to acquire a customer. Annual maintenance costs per customer are $45; record-keeping and billing costs are $30 per customer per annum. Price of the basic service package is $30 per month. Typically, 40 percent of the customers buy a premium package that costs $50 per month; 10 percent by the super premium package that costs $80 per month. Over time, 80 percent of customers remain with the company from one year to the next. Discount rate= 0.12 

A. What is the average CLV for all customers? 

B. What is the CLV of a super premium customer? The given formula for CLV is: CLV = m * r / (1+d-r) - AC(Acquisition Costs)

Answer rating: 100% (QA)

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