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What is the break-even probability of success

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Question - 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 $420,000. If it fails, the company will lose $290,000. Wilson Motors is trying to decide whether it should borrow the $290,000 given the current bank loan rate of 14%. What is the break-even probability of success at the 14% borrowing rate? What is the break-even probability of success if the loan rate is 20%? What is the break-even probability of success if the loan rate is 14%?

Reference no: EM133169002

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