1.The Greensleeves Garden Equipment Company sells and services lawnmowers. The service department manager has determined that the average lawnmower purchaser brings the lawnmower in for service once a year, at the beginning of the mowing season, for 5 years. Greensleeves charges $78 for the annual tuneup, which costs Greensleeves $29 in parts and labor to perform. Estimate the CLV of the service component of a lawnmower purchaser, using the average number of payments approach.

2.Matchless Fireplaces Etc., Incorporated sold Ima Kold a gas firepit that was on sale for $568. Jay Frost purchased a deluxe model for $1,315. lma returned a few months later to purchase a gas-log stove for her rec room for $1,191 and new logs for the gas fireplace in her living room for $350. Matchless earns a 34% margin on its firepits and gas stoves and a 40% margin on its gas logs. Assuming that Matchless does not expect any future sales to either Ms. Kold or Mr. Frost, what is the difference in profit earned between the two customers?