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 $400,000. If it fails, the company will lose $260,000. Wilson Motors is trying to decide whether it should borrow the $260,000 given the current bank loan rate of 15%. Should Wilson Motors borrow the money if: a.the probability of success is 95%? b.the probability of success is 84%? c.the probability of success is 74%?

a. What is the expected profit (or loss) of the project if the the probability of success is 95%?

b. What is the expected profit (or loss) of the project if the the probability of success is 84%?

c. What is the expected profit (or loss) of the project if the the probability of success is 74%?