Question $16|$

Amazon's CLV Pt $5$

Amazon expects that each of the new Subprime members will remain loyal, repeat customers for

at least the $5-$year forecast horizon. They may remain members beyond the initial $5$ years, if we

impress members with our quality of service. However, to remain conservative, we'll assume all

of these subscribers abandon Amazon completely in exchange for Alibaba after $5$ years' time.

Amazon's typical order is $$100,$ at an average gross margin of $30\%.$ Amazon's CFO expects that

sales sourced via Subprime members will have a typical order size of $$125$ and an average gross

margin of $20\%.$

Amazon expects that each new Subprime member will place consistent repeat orders. On

average, each subprime member will place $6$ orders per year.

What are the total # of transactions expected overall, per year, in total for all subprime members?Question $17$

Amazon's CLV Pt $6$

Amazon expects that each of the new Subprime members will remain loyal, repeat customers for

at least the $5-$year forecast horizon. They may remain members beyond the initial $5$ years, if we

impress members with our quality of service. However, to remain conservative, we'll assume all...

of these subscribers abandon Amazon completely in exchange for Alibaba after $5$ years' time.

Amazon's typical order is $$100,$ at an average gross margin of $30\%.$ Amazon's CFO expects that

sales sourced via Subprime members will have a typical order size of $$125$ and an average gross

margin of $20\%.$

Amazon expects that each new Subprime member will place consistent repeat orders. On

average, each subprime member will place $6$ orders per year.

What are the Gross Margin dollars expected overall, per year, in total for all Subprime members?Question $18$

Amazon's CLV Pt $7$

Amazon expects that each of the new Subprime members will remain loyal, repeat customers for

at least the $5-$year forecast horizon. They may remain members beyond the initial $5$ years, if we

impress members with our quality of service. However, to remain conservative, we'll assume all

of these subscribers abandon Amazon completely in exchange for Alibaba after $5$ years' time.

Amazon's typical order is $$100,$ at an average gross margin of $30\%.$ Amazon's CFO expects that

sales sourced via Subprime members will have a typical order size of $$125$ and an average gross

margin of $20\%.$

Amazon expects that each new Subprime member will place consistent repeat orders. On

average, each subprime member will place $6$ orders per year.

What is the CLV $($in total dollars for all Subprime members in total, on an undiscounted basis$)?$

Question $19$

Amazon's CLV Pt $8$

Amazon's CFO suggests using a $10\%$ cost of capital in this scenario.

What is the CLV $($in total dollars for all Subprime members in total, on a discounted basis$)?$

Question $20$

Amazon's CLV Pt $9$

Amazon's CFO suggests using a $10\%$ cost of capital in this scenario.

Your CFO requests your conclusion as to whether this deal is worthwhile and should be

approved. Be sure to support your answer with the relevant metrics and$/$or non$-$quantitative

factors worthy of consideration. Please provide values needed for each questions.