Question: AOL bought customer from CD Now for $60 per customer. CD Now's annual retention rate was 60 percent, and customers generated $15 of profit per

AOL bought customer from CD Now for $60 per customer. CD Now's annual retention rate was 60 percent, and customers generated $15 of profit per year. Assume that the annual discount rate is 12 percent.

1. What is the net present value of CD Now's each customer?

2. AOL's decision to buy CD Now's customers was good decision. True or False

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