Given the information above, what is the amount that Northup should let Wilson borrow? Show calculations and explanation.

After a rapid growth in its business during recent years, the Wilson Lumber Company in the spring of 1985 anticipated a further substantial increase in sales. Despite good profits. the company had experienced a shortage of cash and had found it necessary to increase its borrowing from the Suburban National Bank to $173,000 in the spring of 1985. The maximum loan that Suburban National would make to any one borrower was $175,000 and Wilson had been able to stay within this limit only by relying very heavily on trade credit. Mr. Roger Wilson, sole owner and president of the Wilson Lumber Company, was therefore actively looking elsewhere for a new banking relationship where he would be able to negotiate a larger loan. Mr. Wilson had recently been introduced by a personal friend to Mr. George Dodge, an officer of a much larger bank, the Northrup National Bank. The two men had tentatively discussed the possibility that the Northrup bank might extend a line of credit to Wilson Lumber up to a maximum amount of $325,000. Mr. Wilson thought that a loan of this size would more than meet his foreseeable needs, but he was eager for the flexibility that a line of credit of this size would provide. Subsequent to this discussion Mr. Dodge had arranged for the credit department of the Northrup National Bank to investigate Mr. Wilson and his company The Wilson Lumber Company had been founded in 1975 as a partnership by Mr. Wilson and his brother-in-law, Mr. Henry Stark. In 1982 Mr. Wilson bought out Mr. Stark's interest for $75,000 and incorporated the business. Mr. Stark had taken a note for $75,000, to be paid off in 1983, in order to give Mr. Wilson time to arrange for the financing necessary to make the payment of $75,000 to him. The major portion of the funds needed for this payment was raised by a mortgage of $50,000 negotiated in late 1982. This mortgage was secured by Wilson's land and buildings, carried an interest rate of 14%, and was repayable in quarterly installments at the rate of $5,000 a year over the next 10 years.The business was located in a growing suburb of a large city in the southern section of the Midwest. The company owned land with access to a railroad siding, and two large storage buildings had been erected on this land. The company operations were limited to the wholesale distribution of lumber products in the local area Typical products included plywood, moldings, and sash and door products. Quantity discounts and credit terms of net 30 days on open account were usually offered to customers After a rapid growth in its business during recent years, the Wilson Lumber Company in the spring of 1985 anticipated a further substantial increase in sales. Despite good profits. the company had experienced a shortage of cash and had found it necessary to increase its borrowing from the Suburban National Bank to $173,000 in the spring of 1985. The maximum loan that Suburban National would make to any one borrower was $175,000 and Wilson had been able to stay within this limit only by relying very heavily on trade credit. Mr. Roger Wilson, sole owner and president of the Wilson Lumber Company, was therefore actively looking elsewhere for a new banking relationship where he would be able to negotiate a larger loan. Mr. Wilson had recently been introduced by a personal friend to Mr. George Dodge, an officer of a much larger bank, the Northrup National Bank. The two men had tentatively discussed the possibility that the Northrup bank might extend a line of credit to Wilson Lumber up to a maximum amount of $325,000. Mr. Wilson thought that a loan of this size would more than meet his foreseeable needs, but he was eager for the flexibility that a line of credit of this size would provide. Subsequent to this discussion Mr. Dodge had arranged for the credit department of the Northrup National Bank to investigate Mr. Wilson and his company The Wilson Lumber Company had been founded in 1975 as a partnership by Mr. Wilson and his brother-in-law, Mr. Henry Stark. In 1982 Mr. Wilson bought out Mr. Stark's interest for $75,000 and incorporated the business. Mr. Stark had taken a note for $75,000, to be paid off in 1983, in order to give Mr. Wilson time to arrange for the financing necessary to make the payment of $75,000 to him. The major portion of the funds needed for this payment was raised by a mortgage of $50,000 negotiated in late 1982. This mortgage was secured by Wilson's land and buildings, carried an interest rate of 14%, and was repayable in quarterly installments at the rate of $5,000 a year over the next 10 years.The business was located in a growing suburb of a large city in the southern section of the Midwest. The company owned land with access to a railroad siding, and two large storage buildings had been erected on this land. The company operations were limited to the wholesale distribution of lumber products in the local area Typical products included plywood, moldings, and sash and door products. Quantity discounts and credit terms of net 30 days on open account were usually offered to customers