# Question

Wilson Motors is looking at expanding its operations by adding a second manufacturing location. If successful, the company will make $450,000. If it fails, the company will lose $250,000. Wilson Motors is trying to decide if it should borrow the $250,000, given the current bank loan rate of 15%. Should Wilson Motors borrow the money if

a. The probability of success is 90%?

b. The probability of success is 80%?

c. The probability of success is 70%?

a. The probability of success is 90%?

b. The probability of success is 80%?

c. The probability of success is 70%?

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