Imagine you are consulting for an Internet service provider(ISP) that has hired you to research the impact of customerretention on their bottom line. Assume that their current monthlyturnover is 3%, they have 1000 subscribers, they have set monthlysubscriber fees at $25, and they estimate that their cost to servecustomers is $10. Further, while they report that they do not havean estimate for customer acquisition cost, you do a little numbercrunching and find that they are spending $10 advertising for eachnew customer, they are offering their employees a $5 incentive tosell the service and they provide free installation software thatcosts $10. You also feel that a 5% interest rate is a reasonableprediction. Using this information, calculate the following:
a.) Annual turnover rate
b.) Annual customer turnover number
c.) Margin per month
d.) Break Even Value
e.) Customer Lifetime Value
