What is the current growth rate? What would it be if the defection rate were halved?

Investor's Friend Four years ago, Ava Chase graduated from a prestigious business more ads to increase her revenues, but production costs were school with a major in finance and decided to start her own online escalating, her own advertising costs to solicit new subscribers financial weekly newspaper, Investor's Friend, with an emphasis and advertisers were increasing, and of course her revenues on service to her subscribers. Her main competitive weapon was from renewals were going down. And like any newspaper, she to reduce the cost of the subscription each year to renewing sub- also lost some of her previous subscribers, as well as adver- scribers so that they remained loyal to her newspaper service. tisers. Ava initially didn't make money on the newspaper but They also could go back to any previous issue and read any improved every year, although the improvement started slow- article from earlier editions. In addition, she provided an index ing down. As a result, her finances were getting tight, and she of previously published articles so subscribers could easily and wondered what she should do: increase the new subscription quickly find investing articles of interest to them. Finally, there price, alter the discount either up or down for renewals change was an extensive glossary of financial terminology so they could her newspaper's advertising rates, change the amount of her quickly grasp the details of various financial products. own advertising, some combination of these, or something At this point in the life of the newspaper, as shown in Table else entirely? A, she was getting more subscribers to her paper, as well as Number of new subscribers 531 163 Number of renewals 0 Year 20X1 20x2 20X3 Total subscriber revenues 10,620 13,595 17,783 21,227 Advertiser revenues 0 2124 3509 Production cost 12,444 12,802 14,311 17,975 Advertising cost 3109 2817 482 210 571 3055 20X4 228 706 4788 2478