At the first meeting, team members appear to have a difference of opinion regarding the direction of the project. Robin and Khal

The formula to calculate a customer's lifetime value is the person's total spending MINUS the cost to sustain the relationship

Explanation:

It's essential for any company to assess customer lifetime value to ensure success. Customers are a pivotal element influencing the growth of any business. They are central to buying goods and services produced by the business. Understanding how much it costs to acquire new customers compared to retaining existing ones is crucial.

By analyzing CLTV, a company can make informed decisions regarding marketing goals, cutting acquisition costs, and improving customer retention strategies.CLTV can be determined by taking the amount a customer spends and subtracting the total investment made to maintain that customer relationship.

Answer:

c. $455.75

Explanation:

The calculations for the quarterly payments are as follows:

= Remaining balance ÷ PVIFA factor for 2.5% over 12 years

Here,

Remaining balance is

= $5,500 - $5,500 × 15%

= $5,500 - $825

= $4,675

And the PVIFA factor for 2.5% across 12 years is 10.2578.

Refer to the PVIFA table.

= $4,675 ÷ 10.2578

= $455.75

Considering quarterly payments, the rate is divided by four and the time frame becomes four times as long.

Answer:

1. $501.54

2. 1.01

3. -$5,728.56

Explanation:

The calculations are detailed below:

1. For determining the net present value

Year    Cash flow     Discount factor @20%         Present value  

0         $75,000         1                                               $75,000

1          $20,000        0.8333333333                          $16,666.67

2         $25,000        0.6944444444                       $17,361.11

3         $30,000        0.5787037037                       $17,361.11

4         $50,000        0.4822530864                       $24,112.65

The total of cash inflows is                                                   $75,501.54

NPV                                                                              $501.54                                      

The discount factor is to be calculated as follows:

= 1 ÷ (1 + rate) ^ years

2. The benefit-cost ratio is calculated by:

= Total Present Value ÷ Initial Investment

= $75,501.54 ÷ $75,000

= 1.01

3. For net present value as calculated

Year    Cash flow     Discount factor @20%         Present value  

0         $75,000         1                                               $75,000

1          $20,000        0.8064516129                     $16,129.03

2         $25,000        0.650364204                    $16,259.11

3         $30,000        0.5244872613                    $15,734.62

4         $50,000        0.4229735978                    $21,148.68

The sum of cash inflows is                                                 $69,271.44

NPV                                                                            -$5,728.56                                  

The discount factor is to be computed as stated:

= 1 ÷ (1 + rate) ^ years