Calculate customer lifetime value

Assignment Help Financial Management

Reference no: EM131355204

Assume that a customer shops at a local grocery store spending an average of ?$350 a? week, resulting in a retailer profit of ?$35 each week from this customer. Assuming the shopper visits the store all 52 weeks of the? year, calculate the customer lifetime value if this shopper remains loyal over a? 10-year life span. Also assume a 9 percent annual interest rate and no initial cost to acquire the customer.

The customer yields?$_____per year in profits for this retailer. ?(Round to the nearest? dollar.)

The customer lifetime value is ?$_____

Reference no: EM131355204

Questions Cloud

Make the yield to call or the yield to maturity : Merck inc has 100 million dollars of 20 year bonds outstanding with a coupon rate of 9% with annual payments. Similiar risk bonds selling for YTM of 7%. Merck is going to call the bond this year (they had a call provison at 104), four years after the..

What is the companys horizon value-firms overall value today : Wayne corporation is a growing distributor of electronic products. Analysts are forecasting the following free cash flow series. what is the companys horizon value. What is the firms overall value today. if wayne has 90 million of debt but no preffer..

What will be passaic beta coefficient : Stock is selling for 45$. It is a constant growth with a growth rate of 4% per year. Next years expected dividends are 2.50$ / year. Calcualte required rate of return. If the risk free rate is 2.7% and the risk premium on the market is 8%, what will ..

Common stock valuation-should you make the investment : (Common stock valuation) The common stock of NCP paid $1.21 in dividends last year. Dividends are expected to grow at an annual rate of 5.40 percent for an indefinite number of years. If your required rate of return is 8.30 percent, what is the value..

Calculate customer lifetime value : Assume that a customer shops at a local grocery store spending an average of ?$350 a? week, resulting in a retailer profit of ?$35 each week from this customer. Assuming the shopper visits the store all 52 weeks of the? year, calculate the customer l..

What are the project annual cash flows : NEW PROJECT ANALYSIS You must evaluate a proposal to buy a new milling machine. The base price is $135,000, and shipping and installation costs would add another $8,000. The machine falls into the MACRS 3-year class, and it would be sold after 3 year..

Why would you care as a short-term investor : Given that the U.S. is not a closed economy, which additional component(s) of GDP could be affected (and in which direction) under the hypothetical assump¬tion that the rest of the world is unaffected by news from Wall Street - How would your answ..

Explain the concept of duty to bargain : Explain the concept of "duty to bargain." Explain yellow-dog contracts. What are the three ways by which employees can become union members?

Concept such as emotional development and attachment theory : If you are the parent of a young child and you choose attachment, briefly summarize the text material that you are addressing and apply it to an example related to parenting your toddler.

User Account

All Pages