Wilson Motors is looking to expand its operations by adding a second manufacturing location. If it is successful, the company will make

$430,000.

If it fails, the company will lose

$270,000.

Wilson Motors is trying to decide whether it should borrow the

$270,000

given the current bank loan rate of

18%.

Should Wilson Motors borrow the money ifa.the probability of success is

91%?

b.the probability of success is

82%?

c.the probability of success is

72%?

Question content area bottom

Part 1

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

91%?

$4,2004,200

(Round to the nearest dollar. Enter a negative number for a loss.)