Shannon's currently boasts a customer base of 1,750 customers that frequent the brewhouse on average twice per month and spend$30 per visit. Shannon 's current variable cost of goods sold is 50% of sales. The customer base is growing at the rate of 3% permonth with a customer retention rate of 0.73%, based on data collected from its website and an analysis of credit card receipts. It'scurrent cost of capital for borrowing and investing is about 12% per year. What is Shannon's approximate CLV for its averagecustomer? Compute your answer to the nearest penny.

CLV stands for customer lifetime value refers to the profit generated by the business during its…

Answered: Shannon's currently boasts a customer…

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter22: Providing And Obtaining Credit

Section: Chapter Questions

Problem 2MC

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