A Computer Manufacturer Currently Has a 15 Percent Customer Defection

question 8

Multiple Choice

A computer manufacturer currently has a 15 percent customer defection rate. Their accounting department estimates the incremental contribution to profit and overhead as 30 percent. Customers purchase computers every four years at an average cost of $1,200. In an effort to reduce the defection rate, the company is improving both the quality of its computers and its post-sale service. Determine the value of a loyal customer if the defection rate drops to 5 percent.

• A) Less than or equal to $500
• B) More than $500 and less than or equal to $1,000
• C) More than $1,000 and less than or equal to $1,500
• D) More than $1,500 and less than or equal to $2,000

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Definitions:

Vivid Image

A highly detailed, clear, and striking mental representation or description that evokes a strong visual perception.

Memorable Slogan

A distinctive and catchy phrase used to convey an important message in a memorable way, often for advertising or branding.

Tangible Benefits

Refers to measurable and concrete advantages that result from an action or decision.

Early Success

Early success refers to significant positive outcomes achieved at the initial stages of an endeavor, project, or career, often motivating continued effort and improvement.