Question

Taking into account the time value of money and assuming that 100 percent of a customer segment will have experienced attrition once the net present value of annual profits per customer falls below ¥100, what is the lifetime value to MBC of the following customers? A Little Leaguer A Summer Slugger An Elite Ballplayer if MBC places the ad in the local baseball enthusiasts magazine An Elite Ballplayer if MBC purchases the list and invites all target customers to the gala event An Entertainment Seeker

Answer 1

hello your question is incomplete attached below is the missing information

a) 8848.32 yen

b) 1732.95 yen

c) 13487.95 yen

d) 22578.86 yen

e) 248 yen

Step-by-step explanation:

a) Determine for A little leaguer

At year 15 the NPV annual profit for each customer will fall below 100. hence the lifetime value for each customer will be calculated as :

= ( 9733 / ( 1 + 0.1 ) 15 ) - 10000 = 8848.32 yen

b)Determine for A summer slugger

At year 7 the NPV annual profit for each customer will fall below 100. hence The lifetime value for each customer will be calculated as

= ( 1906 / ( 1 + 0.1 ) 7 ) - 10000 = 1732.95 yen

c) calculate for An elite Ballplayer ( when MBC places ad )

At year 12 the NPV annual profit for each customer will fall below 100. Hence the lifetime value for each customer will be calculated as

=( 13547.31 / ( 1 + 0.1 ) 12 ) - 60000 = 13487.95 yen

d) calculate for An Elite Ballplayer ( when MBC purchases the list )

At year 12 the NPV annual profit for each customer will fall below 100. Hence the lifetime value for each customer will be calculated as

= ( 22638.22 / ( 1 + 0.1 ) 12 ) - 50000 = 22578.86 yen

e) Calculate for An entertainment seeker

At year 4 the NPV annual profit for each customer will fall below 100, Hence the lifetime value for each customer can be calculated as

= ( 273 / ( 1 + 0.1 ) 4 ) - 2000 = 248 yen