1. Calculate the full cost per redeemed coupon given the following facts:

• Face value = 75 ;
• Handling cost = 8
• 20 million coupons distributed at $7 per thousand
• Redemption rate = 3 percent

Pleae answer following questions:

Distribution costs =

Expected redeemed coupons =

Redemption costs =

Handling costs =

Total costs =

Cost/redeemed coupon =

In the scenario above, if misredemption rate is 5 percent, what is cost per successfully redeemed coupon?