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morpeh [17]
3 years ago
6

A commercial cleaning company spends an average of $500 per year, per customer, in supplies, wages, and account maintenance. An

average customer generates $1,000 in revenue per year. Assuming a discount rate of 12% and an annual retention rate of 80%, what is the best estimate for the lifetime value of an average customer using the simplified customer lifetime value (CLV) equation presented in the core reading?
Business
1 answer:
Sonbull [250]3 years ago
5 0

Answer:

$1,250

Explanation:

Calculation for what is the best estimate for the lifetime value of an average customer using the simplified customer lifetime value (CLV) equation

Using this formula

Customer lifetime value (CLV) = r / (1 + i - r)

Let plug in the formula for

Customer lifetime value (CLV) = 0.8 / (1 + 0.12 - 0.8)

Customer lifetime value (CLV) = 2.5

Customer lifetime value (CLV) =($1,000-$5,00)× 2.5

Customer lifetime value (CLV) = $500 x 2.5

Customer lifetime value (CLV) = $1,250

Therefore the best estimate for the lifetime value of an average customer using the simplified customer lifetime value (CLV) equation will be $1,250

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6 0
3 years ago
A nine-year project is expected to generate annual revenues of $137,800, variable costs of $82,600, and fixed costs of $11,000.
AleksAgata [21]

Answer:

Option (a) is correct.

Explanation:

Given that,

Annual revenues = $137,800,

variable costs = $82,600

Fixed costs = $11,000

Annual depreciation = $23,500

Tax rate = 34 percent

Annual Income before Taxes:

= Annual revenues - Variable cost - Fixed Costs - Depreciation

= $137,800 - $82,600 - $11,000 - $23,500

= $20,700

Net income:

= Annual Income before Taxes × ( 1 - T)

= $20,700 × 0.66

= $13,662

Annual operating cash flow:

= Net income + Depreciation

= $13,662 + $ 23,500

= $37,162

3 0
3 years ago
On May 1, Marcus Corporation's retained earnings account had a credit balance of $282,000. During the month, Marcus generated re
TEA [102]

Answer:

What is the balance in retained earnings at the end of May? $294000

Explanation:

may-01 Retaining earning  282000

Income                            16000

Dividens Paid                     -4000

may-30 Retaining earning  294000

   

Revenue 40000  

Expenses24000  

Income 16000  

6 0
3 years ago
Aquaguard manufactures three models of water purifiers in three separate plants at Taiwan. These plants serve the demand in Euro
Zanzabum

Answer:

Aquaguard may choose any of the  two models to minimize the production variability in the new plant.

Explanation:

Model 1: Mean = 1000, Standard Deviation(SD) = 300

Model 2: Mean = 1000, SD = 300

Model 3: Mean = 1000, SD = 300

Coefficient of variation for model 1

C.V = ( SD ÷ Mean) × 100

= ( 300 ÷ 1000 ) × 100

= 30 %

Coefficient of variation for model 2

= ( 300 ÷ 1000 ) × 100

= 30 %

Coefficient of variation for model 3

= ( 300 ÷ 1000 ) × 100

= 30 %

 We conclude that all the models have same effect .

5 0
3 years ago
Staples, the office supply store, owns Quill, which specializes in selling to more than 1 million small and mid-sized U.S. busin
ella [17]

Answer: function---B

Explanation:Staples has found it pays to departmentalize by _function______.

This means that Staples will supply its products according to the function of various departments ie according to the activities performed or carried out by such department since it has found out that it is beneficial to the company

for eg, Quill is a subsidiary of Staples supplies medical supplies to doctor:s offices.

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3 years ago
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