Answer: The required average is $576.
Step-by-step explanation:
Since we have given that
Percent of customers not returning each year = 25%
Average customer lifetime =
Percent of margin on the average bill = 60%
Cost per visit = $12
Number of times each year visited = 20 times
So, Average expense by each customer per year =
Average margin = 60% of 240 =
Average non discounted gross profit during a customer's lifetime is given by
Hence, the required average is $576.