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Customer Lifetime Value

Customer Lifetime Value. Discount rate. D = (1 + ( i x rf )) n Where D = Discount rate, i = interest rate, rf = the risk factor, and n = number of years that you have to wait.  

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Customer Lifetime Value

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  1. Customer Lifetime Value

  2. Discount rate • D = (1 + (i x rf))n • Where D = Discount rate, • i = interest rate, • rf = the risk factor, • and n = number of years that you have to wait.   • With a risk factor of 2 and an interest rate of 8%, the discount rate in the third year (two years from now) is D = (1 + (.08 x 2))2    or D = (1.16)2 = 1.35.

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