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23 October, 00:08

A company had a profit of $350,000 in its first year. Since then, the company's profit has decreased by 12% per year. Assuming this trend continues, what is the total profit the company can make over the course of its lifetime? Round your answer to the nearest dollar.

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  1. 23 October, 00:55
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    Sn = $2,916,666.67

    Explanation:

    Given:

    First year profit (PV) = $350,000

    Rate of trend (r) = - 12% = - 0.12

    It is assume that firm doing his business continuously.

    Formula to find geometric mean:

    It is assumed that firms using the sum of geometric formula to find the trend.

    Sn = a[1/Rate of trend]

    Sn = $350,00[1/0.12]

    Sn = $2,916,666.67
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