1.

Company 2018 Gross Revenue $	$5,750,000
Company 2018 Gross Margin $	$3,650,000
Number of Customers	12,000
Annual Retention Rate	65%
Annual Discount Rate	12%
Cash Received	At beginning of the year

Question a

What is the average LTV of a customer?

Question b

What is the maximum you should spend to acquire a new customer?

2. You work in a sales role and need to decide which customer to visit. Client A is considering a one-time purchase of $30,000. Client B is considering a purchase of $20,000 with a service contract. For the service contract, the client pays $10,000 at the end of each year for 3 years.

Both clients seem equally interested and the gross margin % is equal for both clients. Your manager suggests you should visit Customer A. Do you agree, why or why not?