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

AOL bought customers from CD Now for $60 per customer. CD Nows annual retention rate was 60 percent and customers generated $15 of profit per year. Assuming an annual discount rate of 12 percent, evaluate AOLs purchase of CD Now customers. Assume profits occur at the end of each period.

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