In the context of the Bhattacharya [1979] model, assume that the personal tax rate is 25%, the

Question:

In the context of the Bhattacharya [1979] model, assume that the personal tax rate is 25%, the penalty associated with a shortfall is 50%, the project cash flows are uniformly distributed over (0,500), and the appropriate is 20%. What is the optimal and value response to this What is the impact of changing the personal tax rate to 30%? Changing the cost of a shortfall to 70%? Changing the to 40%?
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