What is after tax benefit of the risk management plan

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Reference no: EM131272008

A company's before tax profit could be 2 million with 70% probability or -1 million with 30% probability if no risk management strategy is used. With certain risk management strategy the company's before tax profit will be 1 million each year. To implement the risk management plan, the cost is 0.1 million. The company has a tax rate of 25%. What is the after tax benefit of the risk management plan? Do you think this company should implement this risk management strategy?

Reference no: EM131272008

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