Discuss Cisco 700-805 Exam Topic 3 Question 90

Customer A purchased a one-year WebEx contract of 100 seats at $10 per seat. Customer B purchases a three-year WebEx contract of 100 seats at $10 per seat.

What is the annual recurring revenue (ARR) for each?

C$1000 and $1000

A$1000 and $3000

D$3000 and $3000

B$1100 and $3300

Suggested Answer: C

The annual recurring revenue (ARR) for each customer is $1000 and $1000. ARR is the total amount of money the company expects to receive from its subscribers over a year. It is calculated by summing up customers' monthly or quarterly subscription fees and multiplying them by 12 (for an annual period). It excludes one-time fees, transactional charges, and other non-recurring revenue sources. In this case, both Customer A and Customer B pay $10 per seat per month for 100 seats of WebEx. Therefore, their monthly recurring revenue (MRR) is $10 x 100 = $1000. To calculate their ARR, we multiply their MRR by 12: $1000 x 12 = $1000.The length of the contract does not affect the ARR calculation, as it only considers the revenue generated within one year.

Get Premium 700-805 Questions as Interactive Web-Based Practice Test or PDF Real Exam Format Detailed Explanations Instant Access Get Your Practice Test

26 comments · newest first

Cory 3 months ago

Makes sense! It's all about the yearly rate, not the contract length.

Elvera 3 months ago

Exactly! Both have the same annual revenue.

Mertie 4 months ago

Right! Customer B would have $3,000 total, but $1,000 ARR too.

Rikki 4 months ago

I think it's straightforward. Customer A has $1,000 ARR.

Elfrieda 5 months ago

Totally makes sense, same price per seat!

Jesusa 6 months ago

Wait, how can they have the same ARR with different contract lengths?

Timothy 6 months ago

Yeah, both are $1,000 annually!

Elza 6 months ago

Customer B's ARR is also $1,000, right?

Elroy 6 months ago

Customer A's ARR is $1,000.

Gearldine 6 months ago

Haha, I bet the exam writer thought this was a real stumper. Little do they know, we're math wizards!

Vallie 6 months ago

I'm going to go with the answer that involves the least amount of math. Less chance of messing it up that way.

Oneida 7 months ago

Wait, isn't the ARR just the total contract value divided by the number of years? This seems too easy.

Sean 7 months ago

Looks like Customer B got a better deal with the 3-year contract. Gotta love those volume discounts!

Angelica 7 months ago

The ARR for Customer A is $1,000 and for Customer B is $3,000.

Thora 7 months ago

I believe both customers have the same ARR since we only care about the annual amount, but I need to double-check how to handle the multi-year contract.

France 7 months ago

For Customer A, I feel confident it's $1,000 annually, but Customer B's ARR calculation is confusing me. Do we divide the total by three?

Lynna 8 months ago

I remember practicing a similar question where we had to calculate ARR for different contract lengths. I think we just take the annual amount for both customers.

Gayla 8 months ago

I think the ARR for Customer A is straightforward since it's just $10 per seat times 100 seats, but I'm not sure about Customer B's three-year contract.

Vashti 8 months ago

Okay, I think I understand now. The key is to calculate the total cost for each customer and then divide by the number of years to get the ARR. This should be a straightforward calculation.

Charlene 9 months ago

No problem, I've got this. For Customer A, it's 100 seats x $10 per seat = $1,000 ARR. For Customer B, it's 100 seats x $10 per seat x 3 years = $3,000 total, so the ARR is $1,000.

Laurena 9 months ago

I'm a bit confused on how to calculate the ARR for Customer B. Do I need to multiply the total cost by 3 and then divide by 3 to get the annual amount?

Melvin 9 months ago

Okay, let me think this through. For Customer A, it's a one-year contract, so the ARR is just the total cost. For Customer B, I need to calculate the total cost over the three-year period and then divide by 3 to get the ARR.

Ezekiel 9 months ago

Hmm, this seems straightforward. I just need to calculate the total annual cost for each customer and that should give me the ARR.

Mammie 3 months ago

↳ replying to Ezekiel

So, the ARR for A is $1,000 and for B is $3,000?

Christa 3 months ago

↳ replying to Ezekiel

Customer B pays $3,000 annually.

Joye 3 months ago

↳ replying to Ezekiel

Customer A pays $1,000 annually.

Cisco 700-805 Exam - Topic 3 Question 90 Discussion