The Planet Bank receives the following loan proposal from a commercial real estate developer SureToDefault, Inc. Data on Proposed Loan to SureToDefault, Inc.:

Expected Outstanding Loan Amount (EAD): $50,000,000

Probability of Default (PD): 0.5%

Expected Loss given Default (LGD): 40%

Loan Origination Fee: 1%

Interest Margin on Loan: 70 bp (0.70%)

Treasury Capital Charge: 25 bp (0.25%)

Allocation of Overhead: $100,000

What is the expected economic profit from a loan?

Would you accept this proposal? How may your decision change if you consider standalone vs. portfolio risk? Explain.