Answer:
C. $1000
Explanation:
Given that;
20% of customers leave company every year
Jessica decide to acquire customers whose CLV equals or exceeds $5000
If Karly is expected to bring $2000 annual margin
assuming that the company's discount rate is 20% /year =0.2/ year
The objective is to determine the amount the company will spend to acquire her (i,e Karly) as a new customer.
The amount the company will spend to acquire her as a new customer is :
= amount of CLV × discount rate
= $5000 × 0.2
= $1000
Thus, the company should not spend more than $1000 to acquire her as a new customer
