Johns Publishing Company, a new service that writes term papers for college students, provides 11-page term papers from a list of more than 500 topics. Each paper will cost $7.50 and is written by a graduate in the topic area. Johns will pay $20,000 for the rights to all of the manuscripts. In addition, each author will receive $0.50 in royalties for every paper sold. Marketing expenses are estimated to be a total of $20,000 divided equally between Years 1 and 2, and Johns cost of capital is 11 percent. Sales are expected as follows:

Year Volume

1 10000

2 7000

3 3000

a. What are the ethical implications of this investment?