Only need the answer to question 4 & 5

A magazine company hired you to calculate the lifetime value of its subscribers. A subscriber pays for the whole year at the beginning of the subscription period. After each year the subscribers decide to either to pay for another year or to cancel the subscription. During a year, a subscriber receives magazines each week. On average, the profit (contribution margin) from each subscriber is $24 per year. The average yearly retention rate is 28%. The CFO of the company believes that the annual discount rate is 9%. How much is the value of each subscriber to this magazine company? Hint: You can use either the spreadsheet method or use the quick back of the envelop formula to solve this problem. If you use the spreadsheet method, do the calculations for at least 10 periods (years). Answer: 32.95 The marketing manager at the Magazine Company suggests a new customer acquisition strategy with customer acquisition cost of $15. The strategy basically is to offer $15 discount to the new customers. This discount is only for the first year, and the fee is going to jump to the regular fee for the following years. Assume that this strategy does not have any effect on retention rate and contribution margin for each customer. Is this strategy worth pursuing? In other words, does this strategy generate more value for the company? Select one: a. Yes O b. No