Revenue alone can mislead lifetime value calculations when costs vary by order. Probe how contribution margin and CAC change payback and CLV decisions.
Contribution‑margin CLV sums discounted ______ each period before subtracting CAC.
top‑line revenue only
fixed corporate overhead
gross profit after variable costs
impressions purchased
A simple net CLV formula is Σ_t [(Revenue_t − VariableCosts_t) / (1+r)^t] − ______.
gross margin %
breakage liability
customer acquisition cost
cost of equity alone
Why exclude fixed costs when ranking channels by CLV?
GAAP forbids fixed costs
fixed costs equal zero by definition
finance can’t model fixed costs
fixed costs don’t change with customer count and can mask unit economics
If return rates rise, margin‑based CLV typically ______.
rises due to higher volume
becomes undefined
stays unchanged by accounting rules
falls because refunds reduce retained profit
Payback period on CAC is reached when cumulative discounted margin ______.
hits gross revenue
exceeds fixed overhead
matches ARPU
first equals or exceeds CAC
Which cost is typically treated as variable in margin‑based CLV?
executive salaries
payment processing fees tied to order value
office rent
annual audit fee
In multi‑product CLV, segment‑level margins matter because ______.
margins fix attribution bias automatically
discounting is no longer needed
SKU IDs ensure fairness
different mixes of high‑COGS items change lifetime profitability
To stress‑test CLV, analysts often run ______ analyses on margin and churn.
k‑means with k=1
Fourier transform
graph coloring
sensitivity or scenario
Revenue‑based CLV can mislead budgeting because it ignores ______.
click‑through rate
variable fulfillment and service costs
brand guidelines
ad creative length
When discount rate increases, the present value of distant margin ______.
always becomes negative
is unaffected
increases linearly
decreases, reducing long‑horizon CLV
Starter
Reground in variable cost components and unit economics.
Solid
Solid—now incorporate CAC and payback thresholds.
Expert!
Excellent margin-aware CLV mastery—ready for board review.
