Alex has decided to start hand-washing luxury cars for $60/car. Her contribution margin is 96 percent. She spends $500 on a two-week Facebook ad campaign. The campaign gets her get 10 customers. She also estimates the following:

Hand-washes per month per customer: Two

Churn rate: 10 percent

What is her loyalty rate?

100 percent

10 percent

We don't know yet.

90 percent

What is her CAC?

$50

$500

$100

$160

What is her LTV?

$602

$1,152

$1,203

$120

How long does it take her to recover CAC?

Two months

Less than one month

Six months

One month