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

$460,000. If it fails, the company will lose $260,000. Wilson Motors is trying to decide whether it should borrow the $260,000given 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 82%?

c.the probability of success is 72%?

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