Question
Scenario A: Operating performance only improves to 45% and stays flat at that rate until the end of the project. This is 30% likely to
Scenario A: Operating performance only improves to 45% and stays flat at that rate until the end of the project. This is 30% likely to happen
Scenario B: SSCs production facility has been recently changed to an empowerment zone, making them eligible for a reduced federal tax obligation. Their new tax rate is 20%. There is a 20% likelihood of this happening.
Assume there is a 50% chance of the original scenario occurring.
With these new scenarios, what is the adjusted rate of return on the project and what is the risk and coefficient of variation?
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