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What Is the Lifetime Value of a Customer Based on the Following

Question 197

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What is the lifetime value of a customer based on the following data?
Average expenditure - $8,000
Average number of purchases per year - 7
Average life span of a customer - 5 years
Direct and indirect costs of servicing account - $7,000 per purchase
Lifetime value of a customer acquired through this account - $20,000

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