A Company Should Try to Retain the Customer Only as Long

question 12

True/False

A company should try to retain the customer only as long as the cost to discourage defection is lower than the lost profit.

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Definitions:

Compounded Semiannually

The process of applying interest to an initial sum plus any previously earned interest, calculated twice a year.

Interest Rate

The percentage of the principal amount charged by a lender to a borrower for the use of assets, typically expressed on an annual basis.

Compounded Semiannually

Interest on a loan or investment calculated twice a year and added to the principal so that subsequent interest is earned on the increased principal.

Annual Interest

The amount of interest payable every year on a loan or investment, typically expressed as a percentage of the principal amount.