00:01
In this problem we have the following data.
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Number of customers is equals to thousand.
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Retention rate is 80%.
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Customer revenue is $200.
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Revenue growth rate is 10 % per year.
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Cogs is equals to 50 % of sales.
00:27
Operating expenses is equal to 20 % of sales.
00:32
Percent of sales interest expense is thousand dollars per year and discount rate is 8%.
00:45
We need to calculate the net present value.
00:49
Now to solve this, let's draw a table as shown.
00:54
So here we have a table as shown.
00:58
In this column we have today's value.
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This is first column, this is second, this is third.
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This is fourth and this is fifth and here in this column we have number of customers and today we have thousand customers and since the retention rate is 80 percent so after one year we will have 80 percent of thousand which means 800 and for the second year or after one more year we will have 80 % of 800 which means 640 customers.
01:46
Similarly we will have 80 % of 640 which means 512 then 409 .6 and then 327 .68.
02:01
Now in this row let's write revenue per customer and and today we have revenue of $200.
02:18
Then growth rate is 10%.
02:24
Therefore, after one year, revenue is 220, which means 10 more percent from 200.
02:34
Now, for the second year, this will be 242.
02:39
For third year, 266 .2.
02:42
Then 292 .82 .82 then 32 .102.
02:52
Now let's multiply the first and second row to calculate sales revenue.
03:06
So we get thousand times 200 which means 2 lakh and here we get 1 ,000 .7 ,000.
03:21
Here we get 1 ,054 ,880, 1 ,36 ,294 .4 .1199397.
03:42
And finally here we have 1 ,5 ,546 .36 .38 .38.
03:54
Now in this column let's write the cogs which is 50 % of sales revenue.
04:05
So let's write the 50 % value of each of the above values.
04:10
So 50 % of 2 lakh which means 1 lakh.
04:16
Here we get 88 ,000 then 77 ,440, 68 ,000, 68 ,000, 60 ,000, 6 ,8 ,000, 6 ,000 ,000, 6 ,000 ,000, 6 ,000.
04:26
Then 1 ,147 .2 then 59 ,969 .55, then 52 ,773 .19 .19.
04:43
Now, let's write the another row.
04:48
So here, let's write gross profit.
04:58
And to calculate that, let's subtract...