Which of the Following Best Describes a Lifetime Customer Value

question 61

Multiple Choice

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

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

Understand cost calculations under variable costing.

Differentiate between absorption and variable costing.

Calculate net income under variable and absorption costing.

Understand the impact of operational decisions on net income.

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Definitions:

Capitalized Interest

Interest expenses that are included as part of the cost of constructing a long-term asset and thus included in the asset's valuation on the balance sheet.

Incremental Borrowing

Refers to the additional interest or costs a company incurs to obtain extra funds or increase its level of debt.

Commercial Substance

The concept refers to a situation where the risk, timing, or amount of future cash flows of a business changes as a result of a transaction.

Straight-Line Method

A method of calculating the depreciation of an asset, which spreads the cost evenly over its useful life.