Question
A marketer of a medication is willing to invest in the acquisition of new patients. What would be the upper limit of this investment per
A marketer of a medication is willing to invest in the acquisition of new patients. What would be the upper limit of this investment per patient assuming the follow retention/attrition rate and assumptions? Should the marketer spend an additional $2.00 per month to reduce the attrition rate by 2% per month (e.g. 95.10 instead of 93.10 or 89.40 instead of 87.40 in the first two months)? Assumptions: 1. Revenue per patient per month=$250 2. Medications are paid for at the end of the month 3. Internal rate of return of 18% compounded monthly. Retention rate for a typical cohort Month Retention Month 0 100.00 Month 1 93.10 Month 2 87.40 Month 3 82.82 Month 4 79.32 Month 5 77.29 Month 6 75.30 Month 7 73.36 Month 8 71.46 Month 9 69.70 Month 10 67.98 Month 11 65.50 Month 12 63.9
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started