Question

Assume that a customer shops at a local grocery store spending an average of $400 a week, resulting in a retailer profit of $20 each week from this customer. Assuming the shopper visits the store all 52 weeks of the year, calculate the customer lifetime value if this shopper remains loyal over a 10-year life span. Also assume a 7 percent annual interest rate and no initial cost to acquire the customer. The customer yields $____per year in profits for this retailer. (Round to the nearest dollar.)

Answer 1