5. Finally, let's say that you are evaluating the NPV of 2 firm customers over the last 5 years and wish to find out which is the most valuable. Compute the totals using r = 5%: Note below: The basic formula for profit is (TR-TC). Another way of looking at it is 1-COGS = Profit Margin (PM). So if you want to see how profitable a firm is, you'd multiple PM x Sales to get your total profit from each firm. The problem below states the COGS so you need to convert to PM. AVG COGS for A1 =.75 Customer A spends: 2015: $7,500,000 (.__) = (___________) x (1 +.05)5 = ___________________ 2016: $6,550,000 (.__) = (___________) x (1 +.05)4 = ___________________ 2017: $3,550,000 (.__) = (___________) x (1 +.05)3 = ___________________ 2018: $7,450,000 (.__) = (___________) x (1 +.05)2 = ___________________ 2019:$9,500,000 (.__) = (___________) x (1 +.05)1 = ___________________ Total NPV for Company A1: $_________________________________