A comparison of year-to-year changes in customer net present value estimates
A) is one way to add certainty to the customer evaluation process.
B) highlights whether managers have been successful in maintaining long-run profitable relationships with their customers.
C) can be used to motivate customers.
D) is difficult to calculate because of the need to know the customers' cost of capital.
E) can be used in place of the payback method.

Question

Quizplus · Accepted Answer

Comparing year-to-year changes in customer net present value estimates allows managers to see if they have been successful in maintaining profitable relationships with their customers over the long-term. It helps to evaluate the effectiveness of strategies implemented to improve customer value and retention.

A Comparison of Year-To-Year Changes in Customer Net Present Value