Analysts pointed out that Boeing actually consisted of two separate businesses: the relatively more stable defense business and the conversely more volatile commercial business. Defense corporations were the beneficiaries when the world became unstable due to the terrorist attacks on September 11, 2001. Furthermore, the United States, along with some of its allies, went to war against Iraq on March 20, 2003. While Bush declared an end to major Iraqi combat operations on May 1, 2003, as of June 16, the death toll in Iraq continued to rise on a daily basis. A different type of risk emanated with the outbreak of SARS. On February 1, 2003, China announced the discovery of the deadly and contagious illness that subsequently spread to Canada and Australia. As of June 16, travel warnings were still outstanding. Thus, the question arose of whether one should estimate Boeing’s cost of capital to serve as a benchmark-required rate of return. Would a required return on a portfolio of those two businesses be appropriate for evaluating the 7E7 project? If necessary, how might it be possible to isolate a required return for commercial aircraft?