You are the operations manager of Stevens Co., a manufacturer of HVAC systems in Central Ohio and you must assess the customer lifetime values of different major customers. Your three major customers are three large home improvement stores that sell your products. You would like to calculate the expected lifetime profitability of each of these major customers to develop more effective customer relationships and marketing efforts. The three major customers and their characteristics are given below:



Home Depot

Lowe’s

Menards

Avg. Sales/Yr.

$3,500,000

$2,800,000

$4,000,000

Avg. Profit Margin

20%

15%

12%

Expected Lifetime

5

15

10



Using the discount rate of 8% and treating average sales figures as annuities, calculate the lifetime values of each customer.