Signing a Publishing Contract: Calculations?

There are lot of reasons why authors want to go with trade publishers. They don’t want to do the work. They want books on the shelves. Or they want the prestige. They think a trade publisher will do a better job in marketing. They want reviews in major print publications. Great expectations and wishful thinking… But how will you fare money-wise in the end?
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Imagine you have two publishing offers:
One has a advance of $5,000 and 6,5% royalties against the advance, the other publishing contra...