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

question 118

Multiple Choice

In assessing possible new customers, a distributor desires that a new customer have a customer lifetime value of at least $10,000. Assuming an 8% discount rate, average annual sales of $65,000, and a customer expected lifetime of 10 years, what is the minimum profit margin needed to assure a lifetime value of at least $10,000?

• A) 10%
• B) 11%
• C) 12%
• D) 13%

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