A Coffee Shop's Average Transaction Price Is $3, the Contribution

question 48

Essay

A coffee shop's average transaction price is $3, the contribution margin is 60 percent, a typical customer makes a purchase once a week or 52 weeks per year, and the management estimates the value of a loyal customer over the buying life cycle as $520. What is the customer defection rate?

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Definitions:

Hypomanic

A mood state characterized by persistently elevated, expansive, or irritable mood, but less severe than full-blown mania, often seen in bipolar disorder.

Mania

A bipolar mood disorder characterized by flamboyance and expansiveness. A person experiencing a manic episode may go on shopping sprees, engage in sexually promiscuous behaviour, take on numerous, unrealistic work commitments, brag, and dominate others socially. In general, the person shows intolerance when the world does not cooperate with his or her momentary needs. Extreme or prolonged cases of mania are considered bona fide psychotic states, implying that the person is experiencing a break with reality. From the Greek mainomai, “to be mad.” See also hypomania.

Depression

A mental health disorder that is marked by persistent feelings of sadness, apathy, and loss of interest, significantly affecting daily functioning.