Work through a complete calculation of customer lifetime value, which is provided over a ten$-$year period with the following assumptions:

that the initial$$acquisition cost$$per customer is $$200$

that the average$$customer revenue$$starts at $$500$ in year one and increases by $$60$ per year $$ customer costs have been set at $50\%$ of revenue $$ therefore, it costs the firm in $($in year one$)$ $$250$ in product and service costs to generate $$500$ revenue

only customer revenues and costs are considered up to year $10,$ with any subsequent revenues being disregarded in the calculation

a$$retention rate$$of $80\%$ has been used

and a$$discount rate$$of $10\%$ has been applied

Questions:

Work through the calculations on the chart on the next page

What options could be pursued in order to improve final customer lifetime value $($that is$,$ what numbers could increase or decrease$)$ to increase the final value?