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Determine the cltv for the client in the four ways

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Reference no: EM133121944

An Insurance Company wants to calculate the CLTV of a client who is expected to generate new sales of $375,000 per year for an expected 12 years. If the margin (SP-VC) on this sales is expected to be 22%. Determine the CLTV for the client in the four ways using the following relevant additional information:

i) Easy Method

ii) Simple Formula (assume a 7% churn)

iii) Traditional formula (using 7% churn and an interest rate of 10%)

iv) The Finance Division calculated that the client would bring in net returns of $80,000 at the end of every year for 12 years and agreed to use a cost of money of 10% compounded annually. Find the CLTV using this method.

Reference no: EM133121944

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