Final answer:
The appropriate discount rate for calculating customer lifetime value takes into account the time value of money and the risks associated with the customer relationship. It is usually higher than the annual discount rate and can vary depending on the industry and specific circumstances.
Step-by-step explanation:
The discount rate between purchase occasions that could be used to calculate the customer lifetime value of a newly acquired customer is not directly provided in the question. However, the annual discount rate of 10% is likely not applicable in this context. The appropriate discount rate for calculating customer lifetime value takes into account the time value of money and the risks associated with the customer relationship, such as customer churn and changes in purchasing behavior. The discount rate used for customer lifetime value calculations is usually higher than the annual discount rate and can vary depending on the industry, company, and specific circumstances.
For example, in the telecommunications industry, the discount rate for calculating customer lifetime value may be around 15-20%. In the software industry, the discount rate may be higher, around 25-30%. These higher discount rates reflect the higher risks and uncertainties associated with customer retention and the potential for changes in purchasing behavior over time.
Therefore, none of the options provided (a. 0.1, b. 30, c. 0.0055, d. 17) are suitable for calculating the discount rate between purchase occasions for customer lifetime value calculations. The appropriate discount rate needs to be determined based on industry benchmarks or specific company data.