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Eastern Motors Auto Dealership wanted to estimate the average CLV over a 5 year time...

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Accounting

Eastern Motors Auto Dealership wanted to estimate the average CLV over a 5 year time horizon of a customer who purchases a new vehicle. The average vehicle sells for $26,400 and has a margin of 12%. Based on historical averages, 79% of people buying a new vehicle at Eastern will return for service 7 times over the next 5 years. Though it varies considerably, Eastern generates approximately $86 in margin on each service visit after accounting for parts and direct labor costs.

Not including service, what is the average dollar margin for each new vehicle sold?

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