This problem is drawn from the HBS note Customer Profitability and Lifetime Value. The following is a variation of the table on page 4. If the retention rate for occasional buyers is 40%, fill out the three missing pieces of information for Year 3.

Occasional Buyers	Year One	Year Two	Year Three
Margin on Each Purchase	$16	$16	$16
Survival Rate	100%	40%
Cost of Mailing Catalogs	$6	$2	$2
Total Expected Profit per Customer	$10	$5.60
Cumulative Profits per Customer (net of acq. costs)	$(7.50)	$(1.90)