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1. Curled Metal, Inc. (CMI) is trying to determine which market segment to target with its new cushion pads for pile-drivers. It has narrowed its
1. Curled Metal, Inc. (CMI) is trying to determine which market segment to target with its new cushion pads for pile-drivers. It has narrowed its potential customers down to two segments: (1) large international construction companies ("Hugo") and (2) smaller, independent pile- driving contractors ("Petino"). Given the following projections, what's the customer lifetime value (CLV) for Hugo and Petino, respectively?
Hugo Petino Acquisition cost $150,000 $17,500 Annual revenue $400,000 $50,000 Gross margin % 40% 50% Retention rate 90% 75% Interest rate for discounting 10% 10% Number of years over which the customer relationship is assessed 3 3Step by Step Solution
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