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20-30 NPV and customer profitability. Microdot Inc. sells and distributes computer networking equip- ment; its overall margin on sales is 10%. Microdot has customers of

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20-30 NPV and customer profitability. Microdot Inc. sells and distributes computer networking equip- ment; its overall margin on sales is 10%. Microdot has customers of two kinds: low and high volume. Low- volume customers on average generate sales for $5,000 per year and the average tenure is four years. High-volume customers on average generate sales for $18,000. Their average tenure is seven years butthey require an initial investment of $8,000 (comprised mostly of legal fees paid to lawyers to review the long- term contract and upgrades in the software to allow customers to place purchase orders onlinel. Assume a 12% required rate of return. Required 1. Calculate operating income per customer in each year. 2. Microdot estimates the value of each kind of customer by calculating the customer's projected NPV over the total expected time of the contract. Use the operating incomes calculated above to compute the value of each kind of customer. 3. Indicate which type of customer is more profitable for Microdot Inc

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