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:

Advertising

The action of calling public attention to products, services, or events, typically through paid announcements in various media platforms.

Margin Of Safety

It represents the difference between actual or budgeted sales and the break-even point. It indicates how much sales can fall before a business incurs a loss.

Contribution Format

A specific income statement format that separates fixed costs from variable costs to compute contribution margin, which helps in decision-making.

Income Statement

A record presenting the financial performance of a corporation, including its revenue, expenses, and net earnings, over a designated period.