Question

Which of the following are the reasons why an NPV analyses is important?

• A. If provides a historical look at past performance of the business
• B. It provides insights to current reasons for customer satisfaction
• C. It provides a way to assess future "what-if" effects under various business operating conditions
• D. All of the above
• E. None of the above

19: You have calculated LTV values for customers over a period of 3 years, including NPV adjustments for each year. To calculate the average LTV of a customer for Year 3, which of the following apply?

• A. Retention rate is usually assumed to be a fixed value of 15%
• B. The exponent in the NPV calculation is = 3
• C. The denominator of the average LTV calculation is the number of customers that you started with
• D. All of the above
• E. None of the above

Generally, the more precise (narrower) the confidence interval, then the confidence level percentage needs to be ___________

• A. Lower
• B. Higher
• C. Either Lower or Higher
• D. Neither - Confidence Interval and Confidence Level are not related

A 95% confidence interval is equivalent to a hypothesis test alpha level = 0.05.

• A. Yes, but one has nothing to do with the other
• B. Yes, and they are equivalent
• C. No, and one has nothing to do with the other
• D. No, but they are related to each other

When you test a hypothesis, you are essentially analyzing data to determine if "something happened", or "nothing happened"

• A. The null hypothesis means "nothing happened" and the alternative hypothesis means "something happened"
• B. The null hypothesis means "something happened" and the alternative hypothesis means "nothing happened"
• C. Either of these
• D. Neither of these

Answer 1

Ans1:- (C) Explanation:- Because NPV analysis is a good measure of profitability and consider fctor risks

Ans2:- (E) Explanation:- Retention rate can't be fixed to 15% and denominator for avg LTV calculation is no. of years customer is with the company

Ans3:- (A) Explanation:- As confidence level increases ,critical vallues also increase; making confidence intervals wider' making it less precise

Ans4:- (B) Explanation:-There is a close relationship between confidence interval and sigificance level.If your significance level is 0.05 then your confidence interval is 95%.

Ans5:-(A) Explanation:- We always considered Null hypothesis as the outcome which we doesn't require which makes rejection of null hypotheiss significantly correct.That is why we generally consider null hypothesis as nothig happened and Alternative hypothesis as something happened .