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There is a company running a subscription-based business. A marketing manager of this company found that a customer of the company is expected to, on
There is a company running a subscription-based business. A marketing manager of this company found that a customer of the company is expected to, on average, generate $200 of gross contribution per year and the retention rate of the customer is, on average, 85% per year. With 5% of annual discount factor and $500 of acquisition costs per customer, a customer's LTV for the entire life-time is about?
A: $230
B: $350
C: $500
D: $450
E: $850
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