Customer Lifetime Value Describes the Net Present Value of the Stream

question 85

True/False

Customer lifetime value describes the net present value of the stream of future profits expected over the customer's lifetime purchases.

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Definitions:

Tax

A compulsory financial charge or some other type of levy imposed upon a taxpayer by a governmental organization in order to fund government spending and various public expenditures.

Profit

The financial gain achieved when the revenue from a business activity exceeds the expenses, costs, and taxes associated with maintaining the activity.

Demand Curve

A chart that depicts how the quantity of a product demanded by buyers is related to its price, usually sloping downwards.

Marginal Revenue

The additional income earned from selling one more unit of a good or service, crucial for decision-making on output levels.