Determine the expected profitability of an average customer

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Reference no: EM133655460

Question: You operate a gym facility with an annual membership fee of $400. The average profit margin on this fee is $250. Members typically spend an average of $120 per year on gym-related products (protein bars, workout gear, supplements, etc.), with a profit margin of $70. Assuming a historical renewal rate of 75% for each subsequent year and a 5-year time horizon, determine the expected profitability of an average customer.

Reference no: EM133655460

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