In Assessing Possible New Customers, a Distributor Desires That a New

question 25

Multiple Choice

In assessing possible new customers, a distributor desires that a new customer have a customer lifetime value of at least $2,000. Assuming a 7% discount rate, average annual sales of $8,000, and a customer expected lifetime of 5 years, what is the minimum profit margin needed to assure a lifetime value of at least $2,000?

• A) 7%
• B) 6%
• C) 5%
• D) More than 7%

---

Definitions:

Strontonium

A chemical element with the symbol Sr, known for its use in fireworks and as a component in certain alloys.

Oxide Ion

An ion consisting of oxygen and carrying a negative two charge, represented as O^2-.

Helium Ion

A positively charged helium atom, often resulting from the removal of one electron from the neutral atom.

Bromide Ion

The bromide ion is a negatively charged ion (Br-) that is formed when a bromine atom gains an electron.