Lafayette Landscaping Company Sells Mulch to Local Businesses and Residential

Multiple Choice

Lafayette Landscaping Company sells mulch to local businesses and residential customers. Lafayette has decided to begin calculating the expected lifetime profitability of each of their premier customers in order to design marketing promotions. Their top-three customers have the following characteristics:

-Using a discount rate of 16% and treating the average annual sales as annuities, calculate the present value of Rubicon's lifetime value.

A) $16,169
B) $39,000
C) $18,092
D) $24,682
E) Do not have enough information to compute