1-13. Assume that a customer shops at a local grocery store spending an average of $200 a week, resulting in a retailer profit of $10 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 5 percent annual interest rate and no initial cost to acquire the customer.

(AACSB: Communication; Analytic Reasoning)