Question
Eastern Motors Auto Dealer wanted to estimate the average CLV of a customer purchasing a new vehicle over a 5-year time horizon. The average vehicle
Eastern Motors Auto Dealer wanted to estimate the average CLV of a customer purchasing a new vehicle over a 5-year time horizon. The average vehicle sells for $26,400 and has a 12% margin. According to historical averages, 79% of people who buy a new vehicle at Eastern will return for service 7 times in the next 5 years. While it varies considerably, Eastern gets a margin of approximately $86 per service visit after accounting for parts and direct labor costs.
What is the average dollar margin for each new vehicle sold, not including service?
Step by Step Solution
3.32 Rating (152 Votes )
There are 3 Steps involved in it
Step: 1
According to the above question they get a 12 margin on each vehicle ...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 StartedRecommended Textbook for
An Introduction to Management Science Quantitative Approach to Decision Making
Authors: David R. Anderson, Dennis J. Sweeney, Thomas A. Williams, Jeffrey D. Camm, James J. Cochran
15th edition
978-1337406529
Students also viewed these Accounting questions
Question
Answered: 1 week ago
Question
Answered: 1 week ago
Question
Answered: 1 week ago
Question
Answered: 1 week ago
Question
Answered: 1 week ago
Question
Answered: 1 week ago
Question
Answered: 1 week ago
Question
Answered: 1 week ago
Question
Answered: 1 week ago
Question
Answered: 1 week ago
Question
Answered: 1 week ago
Question
Answered: 1 week ago
Question
Answered: 1 week ago
Question
Answered: 1 week ago
Question
Answered: 1 week ago
Question
Answered: 1 week ago
Question
Answered: 1 week ago
Question
Answered: 1 week ago
Question
Answered: 1 week ago
Question
Answered: 1 week ago
Question
Answered: 1 week ago
Question
Answered: 1 week ago
Question
Answered: 1 week ago
Question
Answered: 1 week ago
View Answer in SolutionInn App