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Q 1 2 : ( Growing Annuity ) A publisher is trying to decide whether to revise a popular book. The company has estimated that

Q12: (Growing Annuity) A publisher is trying to decide whether to revise a popular book. The company has estimated that the revision will cost $325,000. Cash flows from increased sales will be $94,000 the first year. These cash flows will increase by 4 percent per year. The book will go out of print five years from now. Assume that revenues are received at the end of each year. If the company requires a return of 10 percent, should it accept the revision?
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