An e-commerce site that sells beverages has enrolled 17,863 into a coffee club. The financial data is provided in Figure 9.19. The retention rate for Year 2 was 43% and for year 3 was 68%. While the average number of purchases of coffee per year increased each year, the average sales per purchase did not increase significantly. The company calculated they spent $175,000 to develop the coffee club. Calculate the net marketing contribution for each year, the cumulative net marketing contribution, and the overall lifetime value of the members in the coffee club.
Master Budget
A master budget can be defined as an estimation of the revenue earned or expenses incurred over a specified period of time in the future and it is generally prepared on a periodic basis which can be either monthly, quarterly, half-yearly, or annually. It helps a business, an organization, or even an individual to manage the money effectively. A budget also helps in monitoring the performance of the people in the organization and helps in better decision-making.
Sales Budget and Selling
A budget is a financial plan designed by an undertaking for a definite period in future which acts as a major contributor towards enhancing the financial success of the business undertaking. The budget generally takes into account both current and future income and expenses.
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