Question: A cellphone provider s average phone bill is $ 2 1 . 8 0 per month. It has two variable costs, including $ 4 account

A cellphone providers average phone bill is $21.80 per month. It has two variable costs, including $4 account per month for maintenance and $3 for marketing per year. Its customer attrition is .65% per month. The company also has an average monthly discount rate of 2%. Answer the following questions (10 points each).
1. How much is the companys average CLV?
2. What happens to the CLV if the company reduces the maintenance costs by $1 per month and $1 for marketing, with all other things unchanged? What happens to the CLV if the company reduces the customer attrition to .5% per month?
3. Between reducing costs vs reducing attrition, discuss which one the company should focus, and why?

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