Question

Using the information in the following scenario determine how much revenue Loyal Customer A is responsible for bringing in to your business. Scenario:

Loyal Customer A comes to your video rental shop every weekend and spends an average of $35 on movie rentals and purchases. Loyal CustomeryA has been coming in weekly for the last two years and has even referred a new customer to you. The new customer moved in to her apartment complex six months ago and has been spending $15 on movie rentals every two weeks since then. How much revenue is Loyal Customer A responsible for?

Answer 1

Loyal Customer A is responsible for bringing in $2,015 in revenue to the business.

Step-by-step explanation:

Loyal Customer A is responsible for bringing in revenue by spending an average of $35 on movie rentals and purchases every weekend. They have been doing this for the last two years. Additionally, they referred a new customer to your video rental shop who has been spending $15 on movie rentals every two weeks for the past six months. To calculate the revenue Loyal Customer A is responsible for, we can add up their own spending and the spending of the customer they referred:

Loyal Customer A's spending: $35/week * 52 weeks/year = $1,820/year

Referral customer's spending: $15/2 weeks * 26 weeks/year = $195/year

Total revenue from Loyal Customer A: $1,820 + $195 = $2,015/year