Customer A generates $12,500 (on average) of annual sales for a supplier with a profit margin of 15%. Customer B generates $18,750 (on average) of annual sales for the supplier with a profit margin of 10%. Assume a 7% discount rate and that each customer has an expected lifetime of 5 years. Which customer has a greater customer lifetime value?
a. Customer A
b. Customer B
c. Customer A and B have roughly equivalent lifetime values
d. Cannot be determined from the information given
c. Customer A and B have roughly equivalent lifetime values
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