Q: 13
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?
Options
Discussion
Option C, pretty sure official Cisco docs and some practice exams highlight ARR doesn't change by contract length.
C here makes sense, ARR should always be annualized regardless of contract length. It's what you get per year, not total over the contract. Some folks mix this up with TCV or total revenue across the term but that's a separate metric I think. Disagree?
Probably C
Had something like this in a mock and ARR is always annual, so both are $1000. Contract length only matters for total contract value, not ARR. Pretty sure but let me know if I'm missing something.
Had something like this in a mock and ARR is always annual, so both are $1000. Contract length only matters for total contract value, not ARR. Pretty sure but let me know if I'm missing something.
I don't think it's C. Contract length should matter for ARR, so for Customer B it'd be $3000 since the 3-year deal locks in more recurring revenue, right? Option A looks better to me but I'm open to correction.
C or A? I thought with B's 3-year deal, ARR jumps to $3000 since you're multiplying by contract length. Official guide practice questions sometimes show it that way. Not totally sure though.
C tbh. The 3-year contract is a trap, ARR stays $1000 per year for both.
C or D here, but C actually fits ARR rules. Even though B has a 3-year contract, ARR is based on what you get yearly, not total contract value. If the question asked for TCV, it'd be different.
Yeah, I'd say A. Both have 100 seats at $10 per seat, but since B is over three years, I thought you'd get $3000 as ARR for that one. Always figured contract length bumps up the annual total. Maybe missing something but that's how I've looked at it, open to hearing why that's off.
Its A. I thought B's ARR would be $3000 since it's a 3-year deal at the same seat price, just multiplied over three years. Feels logical with contract term factored in, but maybe I'm off?
Option A for me. Since Customer B has a 3-year contract, I figured the ARR would be $3000, just multiplying it out. Question's worded pretty clearly, good example. Maybe missing something on how ARR works.
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