output. The firm has tax loss carryforwards that render its tax rate zero, its cost of equity is 16%, and it uses no debt. $ answer to two decimal places. % Should the firm make the investment? , since the project's expected rate of return for the next year the cost of equity. b. Would the firm's break-even point increase or decrease if it made the change? The change would the break-even point. c. Would the new situation expose the firm to more or less business risk than the old one? I. It is impossible to state unequivocally whether the new situation would have more or less business risk than the old one. II. The new situation would obviously have more business risk than the old one. III. The new situation would obviously have less business risk than the old one