Lan Shields Communications, Inc., a cellular communications provider based in Michigan, charges $82 per month for an all you can talk service plan. The company plans to increase marketing expenditure next year, but wants to determine the current CLV before making this decision. Variable costs before marketing are $35 per account per month and monthly retention expenditures are $11 per account. Lan Shields Communication annual attrition rate is 24%, with an annual discount rate of 12%. A) What is the monthly contribution margin (S) per customer account not including retention costs?
B) What is the appropriate monthly discount rate?
C) What is the annual retention rate?
D) What is the monthly retention rate?
E) What is la n Shields Communications' CLV per current customer?