please explain this assignment

Customer Lifetime Value Calculation (a step-by-step guide) For this exercise, you will work through a complete calculation of customer lifetime value, which is provided over a ten-year period with all information clearly provided. Your task is to essentially explain the mechanics of the calculation. The following diagram can be enlarged by clicking, and it provides a ten-year view of customer lifetime value, with the final key CLV number listed in the bottom in yellow. Year o Fear 1 Mar2 Year Year 4 Yes 5 Year Year Year Years Year 30 EXAMPLE CUSTOMER LIFETIME VALUE CALCULATION Initial Acquisition Cost per Customer 250 Average Customer Revenue (of those customers who are retained 500 550 600 650 700 750 800 850 900 950 Average Customer Cost 250 275 300 325 350 375 400 425 450 475 Average Profit Contribution 250 275 300 325 350 375 400 425 450 475 % of Customers Retained each year at a 75% retention rate 100% 75% 56% 42% 32% 24% 18% 13% 10% 8% Average Profit Contrbution of RETAINED CUSTOMERS ONLY 250 206 169 137 111 89 71 57 45 36 1.00 1.10 1.21 1.33 1.46 1.61 1.77 1.95 2.14 2.36 2.59 Discount fiate Applied Each Year at a 10% Discount Rate DISCOUNTED Average Profit Contribution PER RETAINED CUSTOMER Running TOTAL of Average Profit Contribution, with Year 10 - CV 227 170 127 94 69 50 37 26 19 14 -250 23 148 275 368 437 487 524 550 569 583 Student Discussion Questions 1. Work through each line of the calculation and take turns in your group to explain what is happening in each row. 2. Once this is completed, work through the mechanics of the calculation and discuss why each row is necessary. 3. What options with this particular situation have in order to improve final customer lifetime value (that is, what numbers could increase or decrease) to increase the final value