Hi Odeh,

As mentioned, there could be multiple ways to face this problem. A simple way would be to compare the outcome of two scenarios, one with the investment and one without and put them equal:

**Step 1: Calculate the expected outcome without investment**

In this case your expected outcome would be 1200M times 12.6% (where 12.6%=70%*40%*50%*90%); thus

V1=1200*0.126=151.2

**Step 2: Calculate the expected outcome with investment**

In this case your expected outcome would be 1200M times x (where x=70%*y*50%*90%, in which y is the new outcome of Phase 2) minus the investment required of 150M; thus

V2=1200*x-150

**Step 3: Put the results equal**

Now putting the two outcomes equal you get

V1=V2 <->

<->151.2=1200*x-150<->

<->301.2=1200*x<->

<->x=25.1%

Now solving for y:

70%*y*50%*90%=25.1%<->

<->y=79,68%

that is, almost twice the current amount.

Hope this helps,

Francesco