
Essentials Of Investments
11th Edition
ISBN: 9781260013924
Author: Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher: Mcgraw-hill Education,
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Transcribed Image Text:Q1: Shannon's brewery currently boasts a customer base of 1,750 customers that frequent the
brewhouse on average twice per month and spend $26 per visit. Shannon 's current variable cost of
goods sold is 50% of sales. The customer retention rate per month is 0.78, based on data collected
from its website and an analysis of credit card receipts. Its current cost of capital for borrowing and
investing is about 12% per year, or 1% per month. What is Shannon's approximate CLV for its average
customer? Compute your answer to the nearest penny.
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