1. T-mobile is considering a new incentive program for customers in its Young Digerati segment. Specifically, T-mobile is considering whether to give this customer segment a free high-end phone before the end of their second year as a customer (i.e., during the t+1 time period; please assume customers make annual payments). This phone would cost T-mobile $800. Based on the following segment projections, answer the following:
   1. What is the segments CLV without the free phone incentive?
   2. Would T-mobile be justified to give this segment a free phone in Year 2 at an $800 cost to T-mobile? Explain why or why not.

      	Young Digerati
      Acquisition Cost	$300
      Annual Contract Revenue	$600
      Gross Margin %	60%
      Retention Rate	90%
      Interest Rate for Discounting	10%
      Number of years over which the customer relationship is assessed	4