Sam Jones owns Blue Hills Brewery, a microbrewery in Duplin, North Carolina. He charges distributors $125 per case for his premium beer. The distributors tack on 25% when selling to retailers who in turn add a 30% markup before selling the beer to consumers. In the most recent year, Blue Hill's revenue was $6 million and its net operating income was $500,000. Jones reports that the costs of making one case of his premium beer are $27 for raw ingredients, $18 for labor, $6 for bottling and packaging, and $10 for utilities.

Assume that Jones has approached your bank for a loan. As the loan officer, you should consider a variety of factors, including the company's margin of safety. Assuming that other information about the company is favorable, would you consider Blue Hill's margin of safety to be comfortable enough to extend a loan?