I had also heard about 250hp max. from the Volvo factory. IPD may have tweaked an R with a chip and less restrictive exhaust, so 265hp is possible, somewhere.
In the factory '99 "R" all the extra dozen horses (and then some) get lost on their way out of the AWD system and the automatic transmission's torque converter. Look at the contemporary road tests like the one published in R&T for the acceleration numbers. They're good, but hardly spectacular.
The '04 V70R is another, different, story.
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