Compute the customer lifetime value (CLV) of Customer 222 based on the data below for the first six years of the customer relationship. Costs (Ct) were incurred to promote customer retention at a rate of 0.8 in years 1 through 6.
Initial acquisition cost $2,400
n = number of years retained 6
r = retention rate 0.8
Cost of capital 0.1
Mt = margin from customer in year t
M1 $1,000
M2 1,200
M3 1,300
M4 1,400
M5 1,500
M6 1,600
C1 240
C2 200
C3 200
C4 200
C5 160
C6 160
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Compute the customer lifetime value (CLV) of Customer 222 based on the data below for the first six...
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