1 ONLY. Question 1Eastern Motors Auto Dealership wanted to estimate the average CLV over a 5 year timehorizon of a customer who purchases a new vehicle. The average vehicle sells for $27,548and has a margin of 6%. Based on historical averages, 80% of people buying a new vehicleat Eastern will return for service 8 times over the next 5 years. Though it variesconsiderably, Eastern generates approximately $89 in margin on each service visit afteraccounting for parts and direct labor costs.Not including service, what is the average dollar margin for each new vehiclesold?O Question 2Eastern Motors Auto Dealership wanted to estimate the average CLV over a 5 year timehorizon of a customer who purchases a new vehicle. The average vehicle sells for $25,361and has a margin of 8%. Based on historical averages, 81% of people buying a new vehicleat Eastern will return for service 7 times over the next 5 years. Though it variesconsiderably, Eastern generates approximately $99 in margin on each service visit afteraccounting for parts and direct labor costs.What is the 5 year value of the service component of a customer who returnsto Eastern Motors for servicing their vehicle?

The amount of difference between the cost price and the selling price. It is the amount of profit…

Answered: Eastern Motors Auto Dealership wanted…

Entrepreneurial Finance

6th Edition

ISBN:9781337635653

Author:Leach

Publisher:Leach

Chapter4A: Nopat Breakeven: Revenues Needed To Cover Total Operating Costs

Section: Chapter Questions

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A car rental firm is currently renting 8,000 cars per year. How many cars will the firm be renting in 10 years if the demand for car rentals is expected to increase by 7% per year? a. $16,044.88 b. $13,600.00 c. $16,077.29 d. $15,737.21 e. $16,012.78
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