A Coffee Shop's Average Transaction Price Is $4, and the Contribution

Multiple Choice

A coffee shop's average transaction price is $4, and the contribution margin is 60 percent. A typical customer makes a purchase once a week or 52 weeks per year, and the management estimates the value of the loyal customer over the buying life cycle as $520. The customer defection rate is _____.

A) less than or equal to 0.10
B) more than 0.10 and less than or equal to 0.15
C) more than 0.15 and less than or equal to 0.20
D) more than 0.20 and less than or equal to 0.25