A computer manufacturer currently has a 15 percent customer defection rate. Their accounting ...

A computer manufacturer currently has a 15 percent customer defection rate. Their accounting department estimates the incremental contribution to profit and overhead as 30 percent. Customers purchase computers every four years at an average cost of 1,200 . In an effort to reduce the defection rate, the company is improving both the quality of its computers and its post-sale service. Determine the value of a loyal customer if the defection rate drops to 5 percent.
 a. Less than or equal to 500
  b. More than 500 and less than or equal to 1,000
  c. More than 1,000 and less than or equal to 1,500
  d. More than 1,500 and less than or equal to 2,000