AirMaxx is a leading provider of specialized hydraulic systems for use in airplanes. Part of their current simplified income statement for the most recent year is shown below.
Income Statement in $000,000
Revenue 953.0
Cost of Goods Sold (COGS) 410.2
Gross Profit 542.8
Selling, General, and Admin (SG&A) 295.0
R&D and Other Operating Expenses 120.5
Operating Income or Loss 127.3
Their revenue was dervived from 18 customers of which 6 are new, and each contract typically lasts for 3 years. Their CFO estimates that 61% of their SG&A expenses are what would be considered marketing expenses.They have recently been asked to bid on a custom system for CAir, a manufacturer of corporate aircraft. The RFP is for 17 units which will either be a single source contract or divided between two suppliers. They estimate the variable cost to build each system to be $4.8 million per unit and the entire marketing costs for similar projects total approximately $4.6 million (which includes legal, working with the company to understand integration and engineering, as well as more typical marketing costs).
What is the CLV to CAC ratio for AirMaxx?