Question

DeWalt is a tool manufacturer that has clients in three segments in City: 6,600 DIYers, 3,700 Hobbyists, and 1250 contractors. DeWalt makes the following in revenue from each segment monthly: $325, $245, and $1500, respectively. The costs to serve each segment on average are: $80, $65, and $410, respectively. The retention rates for the segments are 73%, 82%, and 76% respectively. Assuming an annual discount rate of 5%, calculate the following:

Answer 1

To calculate the value for DeWalt, multiply the revenue by the retention rate and subtract the cost for each segment. Add up the values for all segments to determine the total value.

Step-by-step explanation:

The question pertains to DeWalt, a tool manufacturer, and their clients in three segments: DIYers, Hobbyists, and Contractors. The monthly revenues and costs for each segment, as well as the retention rates, are provided. To calculate the value, we need to multiply the revenue by the retention rate and then subtract the cost. For example, for the DIYers segment:

Value = ($325 * 0.73) - $80 = $237.25 - $80 = $157.25

Similarly, we can calculate the values for the Hobbyists and Contractors segments using the given information. By adding up the values for all three segments, we can determine the total value for DeWalt.