The typical customer for HumanElement ltd. is of 5 years. The company has a budget of $80,000 for customer acquisition and acquires about 1000 customers per year. It also invests about $20 in customer retention per customer per year.

A. Given that the typical customer purchase is $100 for year 1, $120 for year 2, $150 for year 3, $130 for year 4 and $50 for year 5, calculate the customer life time value for the company. The discount rate is 5%.

B. If the company has about 10,000 customers what is the value of its customer base?

C. What is the customer retention rate? Is the acquisition rate appropriate? Why or why not?