Calculate customer lifetime value prior to reward program


Question: Summer Moon Coffee Rewards Program Based on the table below, you will be asked to answer the following questions Summer Moon Coffee introduces a new loyalty program for customers. Please look at the table below and answer the questions. Pre-Rewards Post-Rewards Spending/Customer $4 $5 Cost of Goods 20% 25% Frequency of Visit/Week 4 times/week 6 times/week Cost of Reward Program N/A (Pre-Rewards) total 5% (4.5% discount + 0.5% reward operation cost) c.f., # of weeks in a year = 52 weeks Please calculate customer lifetime value PRIOR to the reward program, assuming the customer relationship is assumed to be 30 years.

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