1. Smokey Bones Restaurant charges approximately $28 per meal, which cost the restaurant $7 to prepare. Monthly, the restaurant faces monthly overhead costs (utilities, rent, salaries, etc.) of $150,000.

a. Calculate the breakeven number of meals.

b. If the restaurant has a retention rate of 67% by offering $3.50 per customer per month in loyalty program rewards. Assuming a discount factor of 1.5% per month and last month it served 15,650 meals to 7,354 customers, Calculate CLV of these current customers. (Hint: Think of M as the amount of money the restaurant makes per month from each customer). [3] M = [(P-VC) * meals/customer]- RS

c. If the restaurant manager decided to increase loyalty spending to $8 for its existing customers, what would the retention rate have to increase to in order to justify this spending? (Use the CLV from part (b) to find r)

d. If the restaurant is willing spend $500,000 to reach 20,000 Greensboro residents, what is the minimum acquisition rate that would justify this expense? Assume that these new customers would have the same CLV (same M) and eat at the same frequency as the existing customers in part b).

Breakeven Acquisition Rate = Acquisition Spending / CLV

PLEASE SHOW WORK