Question
Average order size for Pit Stop customers who own motorcycles is $239. These customers place 1.6 orders per year, and they typically order merchandise which
Average order size for Pit Stop customers who own motorcycles is $239. These customers place 1.6 orders per year, and they typically order merchandise which generates a 51% contribution margin as percent of revenue. Pit Stop budgets $37 per year each for communications with their motorcycle-riding customers, and annual retention rate is 72%. Customer acquisition cost for these customers is $68 per customer. Assuming a corporate discount rate of 9%, find customer lifetime value for one motorcycle-riding customer at Pit Stop. (Rounding: nearest penny.) show step by step how you got the answer.
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