You will 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?

CLV Worksheet Initial Acquisition Cost Average Customer Revenue Average Customer Cost Average Profit Contribution % of customers retained Average contribution of retained customers Discount rate Average profit contribution Running total of average profits (CLV) Year 0 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year & Year 9 Year 10