Benefits of borrowing. Wilson Motors is looking to expand its operations by adding a second manufacturing...

 

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Benefits of borrowing. Wilson Motors is looking to expand its operations by adding a second manufacturing location. If it is successful, the company will make $410,000. If it fails, the company will lose $290,000. Wilson Motors is trying to decide whether it should borrow the $290,000 given the current bank loan rate of 17%. Should Wilson Motors borrow the money if a. the probability of success is 95% ? b. the probability of success is 81% ? c. the probability of success is 71% ? a. What is the expected profit (or loss) of the project if the the probability of success is 95% ? (Round to the nearest dollar. Enter a negative number for a loss.) Benefits of borrowing. Wilson Motors is looking to expand its operations by adding a second manufacturing location. If it is successful, the company will make $410,000. If it fails, the company will lose $290,000. Wilson Motors is trying to decide whether it should borrow the $290,000 given the current bank loan rate of 17%. Should Wilson Motors borrow the money if a. the probability of success is 95% ? b. the probability of success is 81% ? c. the probability of success is 71% ? a. What is the expected profit (or loss) of the project if the the probability of success is 95% ? (Round to the nearest dollar. Enter a negative number for a loss.)