LTV CAC Ratio I

This problem practices a core SaaS interview concept, understanding how companies evaluate the economics of acquiring and retaining customers. A strong answer should define customer lifetime value and customer acquisition cost, explain how they relate to each other, and describe what the ratio tells management about the efficiency and sustainability of growth. Interviewers ask this because software businesses often spend heavily upfront to win customers, so candidates need to show they understand how recurring revenue models are judged by the balance between customer value and sales and marketing spend.