Adidas estimates that it can persuade Ms. Consumer to start using Adidas shoes, and to continue
purchasing Adidas shoes for the next three years, with likelihood decreasing by 10% (100%, 90%, 80%,
etc.). Marketing activities to get her to start using Adidas shoes are estimated at $50, and she is expected
to spend $100 on a pair of Adidas shoes every year, with the variable costs for each pair of shoes being
$40. Using a discount rate of 15%, what is her CLV to Adidas?

 

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