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please help 17 Consider a more general case where the firm classifies customers into four possible states: - High-value customers: generating $30 of net margin
please help 17
Consider a more general case where the firm classifies customers into four possible states: - High-value customers: generating $30 of net margin (R-C) each period. - Low-value customers: generating $10 of net margin each period. - The discount rate of 10% (r) (start to apply at year 1 ) - Inactive customers: no revenue, but with some probability of becoming active again in the future - Permanently inactive: no revenue, absorption state An example of a four-state customer transition matrix What is the lifettfine value of this customer at the end of year 2 and year 5 ? Year 2: $21, Year 5: $35 Year 2: $18, Year 5:$38 Year 2: $24, Year 5: $40 Year 2: \$26, Year 5:$43 Year 2: $20, Year 5:$36 Step by Step Solution
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