Which of the Following Statements Best Describes a Customer Lifetime

question 35

Multiple Choice

Which of the following statements best describes a customer lifetime value (CLV) ?

• A) CLV is the value placed upon a retailer by a consumer.
• B) CLV is a numerical value of how much a "best customer" shops.
• C) CLV is what a customer contributes to a retailer's profits over his or her entire relationship with the retailer.
• D) CLV is an assessment of how many valued customers shop with a retailer.
• E) CLV is what retailers use to rate the value of guaranteed merchandise.

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Definitions:

Salvage Value

The anticipated market value of an asset at the conclusion of its lifespan.

Present Value

A financial concept that describes the value of a sum of money to be received in the future, expressed in today's dollars, accounting for a specific rate of return or discount rate.

Net Cash Flows

The difference between cash inflows and outflows within a specified period.

Annual Operating Cash Inflows

The amount of money a business expects to receive from its operations over the course of a year.