Q3. (2 points) An average Reserve customer could be one of the three different customer types mentioned in the case Transactors, Revolvers, and Churners. Depending on the customer type, the following table can be used to calculate the Year 1 profits from an average Reserve customer who gets the one-time 100,000-point sign-on bonus. Complete the calculations for Year 1. Then do similar calculations for Year 2 for the average Transactor and the Revolver customers who are acquired in Year 1 (A Churner, by definition, will not continue in Year 2). Report the net annual prots from each type of customer in Years 1 and 2 (NOTE: The card acquisition expense (row J) and the Bonus point expense (row K) are only incurred in Year 1 for an acquired customer). Year1 Transactors Revolvers Chumers Annual Spend A (assume this to stay the same each year) $16'000 $16'000 $4'000 B Fzsgfrzlcl'hzalzgiglfzgac'g: each year) 0% 50% 0% C Interchange fee rate on spend (pg. 13) 1.5% 1.5% 1.5% D Interest rate on revolve balance (pg. 18) 20.5% 20.5% E Average rate for points earned (pg. 18) 2 2 F Points-to-dollar conversion rate 1.5% 1.5% G Annual ca rd fee (pg. 1) $450 $450 H Interchange fee revenue on spend (A X C) . ? ? Customer Costs J Approximate ca rd acquisition expense (pg. 2) $350 $350 $350 K One-time Bonus point expense (F X 100k) $1,500 $1 ,500 $1,500 L Points redemption expense (A X E X F) . ? ? Net Annual Prot from an average customer |(G+H+I)(J+K+L) ? |