You operate a gym facility with an annual membership fee of $400. The average profit margin on
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Question:
You operate a gym facility with an annual membership fee of $400. The average profit margin on this fee is $250. Members typically spend an average of $120 per year on gym-related products (protein bars, workout gear, supplements, etc.), with a profit margin of $70. Assuming a historical renewal rate of 75% for each subsequent year and a 5-year time horizon, determine the expected profitability of an average customer. (1 - Below $600; 2 - Between $600 to $1200; 3 - Above $1200)
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