Frederick Consulting had just landed a white whale of a customer, Wilfrid Laurier University, after spending $52,000 in initial acquisition costs! Laurier is expected to generate $39,000 a year in margin, and Frederick Consulting expects this relationship to last for a very long time (decades). Additional costs to serve and retain Laurier are estimated to be $20,000 annually. The retention rate per period is 92%. The cost of
Frederick Consulting had just landed a white whale of a customer, Wilfrid Laurier University, after spending $52,000 in initial acquisition costs! Laurier is expected to generate $39,000 a year in margin, and Frederick Consulting expects this relationship to last for a very long time (decades). Additional costs to serve and retain Laurier are estimated to be $20,000 annually. The retention rate per period is 92%. The cost of
Chapter10: Capital Budgeting: Decision Criteria And Real Option
Section10.A: Mutually Exclusive Investments Having Unequal Lives
Problem 2P
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Frederick Consulting had just landed a white whale of a customer, Wilfrid Laurier University, after spending $52,000 in initial acquisition costs! Laurier is expected to generate $39,000 a year in margin, and Frederick Consulting expects this relationship to last for a very long time (decades). Additional costs to serve and retain Laurier are estimated to be $20,000 annually. The retention rate per period is 92%. The cost of capital for Frederick Consulting is 15%.
What is the customer lifetime value of Wilfrid Laurier University for Frederick Consulting?
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