6 SpreadsheetUse the Excel template VLC to find the average value of a loyal custormer (VLC) in a target market segment if the average purchase price is $75 per visit, the frequency ofrepurchase is five times per year, the contribution margin is 5 percent, and the average customer defection rate is 25 percent? Round your answer to the nearest dollar Revenue per unitPercent contribution margin to profit and overhead$100.0050.0%0.25Repurchase frequency (purchases/year)Defection rate0.4Buyer's life cycleVLC2.50$31.25

Avg value of Loyal Customer = 75

Answered: Spreadsheet Use the Excel template VLC…

Managerial Economics: A Problem Solving Approach

5th Edition

ISBN:9781337106665

Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Publisher:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Chapter4: Extent (how Much) Decisions

Section: Chapter Questions

Problem 4.4IP

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Customer value Is best understood as. a. The purchasing power that CUstomers benetit trom a certain product. b. The gained benefits, both monetary and nonmonetary, that custormers receve trom a product c.The degree of consumer confidence that customers benefit from the purchasing process. d. The level of customer service that custormers obtain from a company e. The customer relationship shared between a company and its stakeholders.
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Global, Incorporated, has received an order for 1000 widgets, with a total order value of $100 million, to be delivered to a customer in country Beta. The order was generated by Global's subsidiary in country Beta, called Global-B. Global-A, which is Global's subsidiary in country Alpha, produces the widgets and ships them to Global-B. Assume that there are no transportation or other expenses associated with moving widgets from Global-A to Global-B. Global-A incurs direct costs of $50 million for producing 1000 widgets and there are no other variable costs associated with producing and delivering these 1000 widgets to Global-B. Global-B incurs $10 million in costs associated with marketing, sales, and support of this order, and has no other variable costs attributable to this order except the amount that they pay Global-A for the widgets. Country Alpha has a corporate income tax rate of 30 percent, and country Beta has a rate of 40 percent. Global-A suggests that its selling price…
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