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A commercial cleaning company spends an average of $500 per year, per customer, in supplies,...

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Accounting

A commercial cleaning company spends an average of $500 per year, per customer, in supplies, wages, and account maintenance. An average customer generates $1,000 in revenue per year. Assuming a discount rate of 12% and an annual retention rate of 80%, which of the following is the BEST estimate for the lifetime value of an average customer using the simplified customer lifetime value (CLV) equation?

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