Question: Is this worth pursuing and why? In another proposal, the CFO of the magazine suggest that the magazine should increase the subscription fee by 20%.
In another proposal, the CFO of the magazine suggest that the magazine should increase the subscription fee by 20%. Based on her calculation, this will increase the contribution margin (profit) from each customer to $35. The downside is that we expect more customers to stop their subscription each year. She estimates that the retention rate will go down to 9620 if the company implements the new strategy. So, they ask you to help in making the decision. Use the same discount rate as before. What the value of each customer will be if they implement this strategy? Answer: 39.33 Is this new pricing strategy worth pursuing? In other words, does this strategy generate more value for the company? Select one: O a. Yes O b. No Briefly, explain the reason for your answer to the previous question. In another proposal, the CFO of the magazine suggest that the magazine should increase the subscription fee by 20%. Based on her calculation, this will increase the contribution margin (profit) from each customer to $35. The downside is that we expect more customers to stop their subscription each year. She estimates that the retention rate will go down to 9620 if the company implements the new strategy. So, they ask you to help in making the decision. Use the same discount rate as before. What the value of each customer will be if they implement this strategy? Answer: 39.33 Is this new pricing strategy worth pursuing? In other words, does this strategy generate more value for the company? Select one: O a. Yes O b. No Briefly, explain the reason for your answer to the previous
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