Northeastern students buy their groceries at Star Market. On average, a Northeastern student spends about $400 per
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Question:
Northeastern students buy their groceries at Star Market. On average, a Northeastern
student spends about $400 per month at Star Market the first year, $300 per month in
the second year, $250 per month in the third year and fourth years, and $450 per month
in the 5th year.
Star Market's cost of goods sold is 80% of the sales revenue and Star Market spends
12% of revenue on sales and marketing expenses.
Calculate the customer lifetime value for the five years of a student.
Use 10% for the net income discounted (Hint: Use a present value table, which can be
found online.
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