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This mode uses at most 256 colors. When converting to indexed color, Photoshop builds a color lookup table (CLUT), which stores and indexes the colors in the image. If a color in the original image does not appear in the table, the?program chooses the closest one or simulates the color using available colors. Personally, I would stay away from insdexed color, unless it is used in a file that you created for special output. Most of thew time when customers send a file with indexed colors, it is a mistake. Convert to CMYK for 4-color output.
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