Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Western Athletic Club International (WACI) owns and operates a chain of fitness clubs and is interested in estimating the CLV for new memberships. Practically all

image text in transcribed

Western Athletic Club International (WACI) owns and operates a chain of fitness clubs and is interested in estimating the CLV for new memberships. Practically all of WACI's costs are fixed costs Meaning that, when a member pays his or her monthly dues, there are no variable costs associated with that payment and all the revenues go toward covering the fixed costs of the business (facilities, salaries, equipment, etc.) WACl's monthly membership dues are $72 per person. The average member keeps his or her membership active for 18 months. In addition to membership, WACl also offers personal training services through a staff of independent athletic trainers. WACl and the trainer split the fees associated with personal training 50/50. Historically, 22% of members choose to use a personal trainer for, on average, 24 training sessions. Sessions with a personal trainer are priced at $54 each. What is the monthly margin generated by a new membership (don't include training)

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

International financial management

Authors: Jeff Madura

9th Edition

978-0324593495, 324568207, 324568193, 032459349X, 9780324568202, 9780324568196, 978-0324593471

More Books

Students also viewed these Finance questions

Question

are present products technologically competitive?

Answered: 1 week ago