Calculate the net present value of one regular customer

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Reference no: EM131999428

At Dive Shop Inc, regular customers place about 4.5 orders per year. These orders average $106 in retail value, and contribution margin percent is typically 42%. Acquiring a new customer costs Dive Shop about $108, and Dive Shop also spends $32 per customer per year on contests, deals, and communications to keep them coming back. Dive Shop's retention rate is 78%, and the corporate discount rate is 11%. Calculate the net present value of 1 regular customer at Dive Shop. Rounding: penny. Remember, the answer may be negative.

Reference no: EM131999428

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