If a risk requires external help and the contracting process is long, it is prudent to start the process immediately to avoid delays. This proactive approach ensures that the necessary resources will be available when needed. According to PMI guidelines, early action to address risk is essential, especially when external dependencies are involved. Documenting the risk in the risk register or analyzing it further can be done concurrently, but starting the contracting process mitigates the risk of delay.

Each project is unique, even when similar to previous projects, and therefore, it requires a tailored risk strategy. A specific risk strategy for a project ensures that the risks are managed in alignment with the organization's risk appetite while considering the unique aspects of the project. The risk strategy will identify the specific risk thresholds for the project, which may differ from other projects due to variations in scope, stakeholders, or external conditions.
PMI emphasizes the importance of aligning the risk management strategy with the organizational risk appetite. This alignment ensures that the project's approach to risk is consistent with the organization's broader risk management framework and that it reflects the unique risk profile of the project.

Renting equipment until the critical piece is repaired is a "Mitigate" response. Mitigation involves taking actions to reduce the impact or likelihood of a risk event. In this case, renting equipment is a way to reduce the impact of the equipment breakdown on the project's timeline and execution, thereby ensuring that the project can continue with minimal disruption.
PMI's guidelines describe mitigation as a strategy to reduce the severity or probability of a risk, making it a suitable response in this scenario.

The project manager should reassess the risks and analyze the reserve to determine if any adjustments can be made to accommodate the expected additional work. This will help in identifying potential budget-saving measures and making informed decisions on how to proceed.
According to the PMI Risk Management Professional (PMI-RMP) Reference Materials, risk reassessment is the process of reanalyzing existing project risks and identifying new risks throughout the project life cycle1.
Reserve analysis is the process of estimating the amount of contingency reserve and management reserve needed to account for the uncertainty and variability of the project2. In this case, the project manager should conduct a risk reassessment and reserve analysis as the next step, because the budget overruns during execution have changed the risk profile of the project and reduced the available funds to handle future risks.
By conducting a risk reassessment, the project manager can update the risk register and the risk response plan with the current status of the project risks and the effectiveness of the risk responses. By conducting a reserve analysis, the project manager can determine if the remaining contingency reserve and management reserve are sufficient to cover the potential impact of the project risks, and request additional funds if needed.
References: 1: PMI, A Guide to the Project Management Body of Knowledge (PMBOK Guide), Sixth Edition, 2017, p. 442 2: PMI, A Guide to the Project Management Body of Knowledge (PMBOK Guide), Sixth Edition, 2017, p. 215

The expected monetary value (EMV) for this project can be calculated as follows: (0.6 x US$100,000) - (0.4 x US$100,000) = US$60,000 - US$40,000 = US$20,000 profit.
The EMV of a project is the weighted average of the possible outcomes, which are a US$100,000 profit or a US$100,000 loss in this case. To calculate the EMV, we multiply the probability of each outcome by its monetary value, and then add them together. The formula is:
EMV = (Probability of profit x Value of profit) + (Probability of loss x Value of loss) In this case, the probability of profit is 60%, and the value of profit is US$100,000. The probability of loss is
40%, and the value of loss is -US$100,000 (negative because it is a loss). Therefore, the EMV is:
EMV = (0.6 x 100,000) + (0.4 x -100,000) EMV = 60,000 - 40,000 EMV = US$20,000 This means that the project has an expected monetary value of US$20,000 profit, which is the answer option B). The other options are incorrect because they do not match the EMV calculation.
The EMV is a useful tool for comparing different projects or alternatives based on their expected values.
However, it does not account for the variability or uncertainty of the outcomes, which may also affect the project decision making. For example, a project with a higher EMV but a higher risk may not be preferable to a project with a lower EMV but a lower risk. Therefore, the EMV should be used with caution and in conjunction with other risk analysis techniques.
For more information on the EMV and other risk analysis methods, you can refer to the PMI Risk Management Professional (PMI-RMP) Examination Content Outline and Specifications, the A Guide to the Project Management Body of Knowledge (PMBOK Guide) - Sixth Edition, and the Expected Monetary Value (EMV): A Guide With Examples. I hope this helps you understand the concept of EMV and how to apply it to project risk management