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A simple equation but no one actually operates that way. Except for maybe auto manufacturers from late-90s books-turned-movies starring Brad Pitt and Edward Norton.

Most variables are impossible to accurately predict. e.g. "Cost/probability of fine" -> how do you model the cost of brand tarnishment?




how do you model the cost of brand tarnishment

You don't, therefore its cost is mostly absent from budget calculations.

And if that doesn't work, you can always rename the company.




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