An investment bank sends 20,000 packages per year. UPS charges $12.50 per package and the cost to handle and deliver a package is $10. The retention rate per year for investment banks is 80%. On average, UPS spends $50,000 to acquire a new investment bank as a customer. 

What is the customer lifetime value of an investment bank for UPS? (Please ignore discounting, so i = 0, and please assume an infinite time horizon and stable margin and retention rate.)

Answer rating: 100% (QA)

The Customer Lifetime Value CLV can be calculated ... View the full answer