163 Benefits of borrowing . Wilson Motors is looking to expand its operations by adding a second...
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Question:
163 Benefits of borrowing.
Wilson Motors is looking to expand its operations by adding a second manufacturing location. If it issuccessful, the company will make $420,000. If itfails, the company will lose
$280,000. Wilson Motors is trying to decide whether it should borrow the
$280,000given the current bank loan rate of16%.
Should Wilson Motors borrow the money if
(Round to the nearest dollar. Enter a negative number for aloss.)
a. the probability of success is92%?
b. the probability of success is84%?
c. the probability of success is68%?
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