Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Eastern Motors Auto Dealership wanted to estimate the average CLV over a 5 year time horizon of a customer who purchases a new vehicle. The

Eastern Motors Auto Dealership wanted to estimate the average CLV over a year time horizon of a customer who purchases a new vehicle. The average vehicle sells for $24,400 and has a margin of 10%. Based on historical averages,70% of people buying a new vehicle at Eastern will return for service times over the next 5years. Though it varies considerably, Eastern generates approximately $132 in margin on each service visit after accounting for parts and direct labor costs.

What is the 5 year value of the service component of a customer who returns to Eastern Motors for servicing their vehicle?

Step by Step Solution

There are 3 Steps involved in it

Step: 1

To calculate the 5year value of the service component for a ... blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Essentials Of Services Marketing

Authors: Jochen Wirtz

4th Edition

1292425199, 9781292425191

More Books

Students also viewed these Accounting questions

Question

What does a person include in his/her application?

Answered: 1 week ago