Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

The Gotham City News is moving to a paywall subscription service rather than a free news website with unlimited access. If subscribers would like to

The Gotham City News is moving to a paywall subscription service rather than a free news website with unlimited access. If subscribers would like to access more than ten articles per month, they will need to pay a monthly subscription fee of $24. However, if they are also weekly subscribers of the print edition of the newspaper, they receive a 60% discount on the on-line subscription rate. The monthly rate for the print edition of the newspaper is $26. Based on market research, the Times believes that 32% of the households that order the print edition will also order the online subscription. While there are basically no variable costs to the online version, the print edition does cost $22 per month to print and deliver to households.
Market research indicates that the average length a current print edition subscriber will continue subscribing is only 16 months if they choose to also purchase the online subscription. Under these assumptions, what is the expected 3 year CLV for a print edition subscriber who chooses to also subscribe to the online version? (Note: presume they continue for all 3 years with the online version).
CALCULATED VARIABLES:
both = $490
online = $864
print = $144
margin =$4
74 is INCORRECT.
image text in transcribed

Step by Step Solution

There are 3 Steps involved in it

Step: 1

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_2

Step: 3

blur-text-image_3

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

Accounting

Authors: Charles T. Horngren, Walter T. Harrison

7th Edition

0132439603, 9780132439602

More Books

Students also viewed these Accounting questions

Question

Why is there a cost associated with reinvested earnings?

Answered: 1 week ago

Question

Outline the contributions of Socrates to psychology.

Answered: 1 week ago

Question

Define job pricing. What is the purpose of job pricing?

Answered: 1 week ago

Question

What are some companywide pay plans? Briefly discuss each.

Answered: 1 week ago