A. Company XYZ experiences a monthly customer churn rate of 2%. It costs the company (i.e. on average) $2000 in sales force support and another $3000 in marketing communications expenditures to acquire a customer. Thereafter, the annual cost of servicing the customer is $3000. Over the lifetime of each customer, sales average $2500 monthly. The companys gross margin is 40%. What is XYZs average Customer Lifetime Value?

B. Company ABCs annual marketing expenditure budget has averaged $30000 over the past 5 years. Sales revenues have averaged $100,000 annually with a gross margin of 50%. The company is considering the possibility of increasing their marketing budget by 50% in 2014. But they will not do so unless they get a ROMI of 200% on this additional investment. What will total 2014 sales have to be to meet this objective?