Business, 19.10.2021 16:10 kkmoney87

C1: AOL bought customers from CD Now for $60 per customer. CD Now’s annual retention rate was 60 percent, and customers generated $15 of profit per year. Assuming an annual discount rate of 12 percent and that the payment is made at the end of each time period, evaluate AOL’s purchase of CD Now customers. Also assume that the customers do not have any obligation to stay with the company. Is it worth for AOL to make this purchase of customers. Will it make a profit from these customers? Specify which formula you use for answering this question (10 Points)

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C1: AOL bought customers from CD Now for $60 per customer. CD Now’s annual retention rate was 60 per...