Multiple Choice

In a corporate financial model, a manager is estimating the total long-term value of a service contract that generates decreasing annual returns. If the initial revenue in the first year is a1a_1 and each subsequent year's revenue is a fraction rr of the previous year, which of the following formulas correctly represents the total infinite sum SS, assuming that ∣r∣<1|r| < 1?

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Updated 2026-09-19

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