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%?