Question 23: A customer is expected to have the following fu…
Question 23: A customer is expected to have the following future transactions: $1,000 contribution margin, 1 year from now$2,500 contribution margin, 5 years from now$3,000 contribution margin, 10 years from now The firm assumes: A discount rate of 10% A retention rate of 90% It will cost $900 now to acquire this customer (i.e. acquisition cost) Given this information, calculate the firm’s expected Lifetime Customer Value (LCV) for this customer.
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