1.The Massage Place charges $59 for a 60-minute massage. The cost of providing a 60-minute massage is $22. The marketing director has determined that the average client gets a massage once every three months, and she is analyzing the profitability of a membership plan where members receive a discount on massages. The annual membership fee would be $50 and would entitle the member to 1 60-minute massage each month for $56. What additional is the additional value generated by the membership plan per client if an average client books a massage every month under the plan? Assume a three-year time horizon.

2.Everywoman, a relatively new magazine that focuses on issues faced by the average American woman, nets $22 per annual subscription, including retention costs. The annual discount rate is 16%, and the CLV of each newly acquired customer has been calculated to be $42. Calculate the annual retention rate, assuming constant renewal.