Question
Let's assume average lifetime of the customers is 15 years and estimated average revenue from each customer at year1 is $450. It is expected that
Let's assume average lifetime of the customers is 15 years and estimated average revenue from each customer at year1 is $450. It is expected that each year revenue contribution from each customer will grow by 5%. Churn probability of each customers (across all the years) are given in the following table. Customer ID Churn probability 1 30% 2 25% 3 32% 4 25% 5 20% Average Customer acquisition cost was $150 & Current discount rate (cost of money) is 6%. What will be the overall lifetime value generated by this group of customers? ____(Answer in integers, not decimals)
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