Question 458760: I need help on this...Thank you!!
Wing Foot is a shoe franchise commonly found in shopping centers across the United States. Wing Foot knows that its stores will not show a profit unless they gross over $940,000 per year. Let A be the event that a new Wing Foot store grosses over $940,000 its first year. Let B be the event that a store grosses over $940,00 its second year. Wing Foot has an administrative policy of closing a new store if it does not show a profit in either of the first 2 years. The accounting office at Wing Foot provided the following information: 65% of all Wing Foot stores show a profit the first year; 68% of all Wing Foot stores show a profit the second year (this includes stores that did not show a profit the first year); however, 84% of Wing Foot stores that showed a profit the first year also showed a profit the second year. Compute the following. (Use 2 decimal places.)
(a) P(A).
(b) P(B).
(c) P(B | A).
(d) P(A and B).
(e) P(A or B).
(f) What is the probability that a new Wing Foot store will not be closed after 2 years?
What is the probability that a new Wing Foot store will be closed after 2 years?
Answer by stanbon(75887)   (Show Source):
You can put this solution on YOUR website! Wing Foot is a shoe franchise commonly found in shopping centers across the United States. Wing Foot knows that its stores will not show a profit unless they gross over $940,000 per year.
Let A be the event that a new Wing Foot store grosses over $940,000 its first year.
(P(A) = 0.65)
Let B be the event that a store grosses over $940,00 its second year.
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Wing Foot has an administrative policy of closing a new store if it does not show a profit in either of the first 2 years.
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The accounting office at Wing Foot provided the following information:
65% of all Wing Foot stores show a profit the first year; P(A) = 0.65
68% of all Wing Foot stores show a profit the second year (this includes stores that did not show a profit the first year); P(A or B) = 0.68
however,
84% of Wing Foot stores that showed a profit the first year also showed a profit the second year. (P(B | A ) = 0.84
Compute the following. (Use 2 decimal places.)
(a) P(A)= 0.65.
(b) P(B)= 0.68.
(c) P(B | A)= P(A and B)/P(A) = 0.55/0.65 = 0.85
(d) P(A and B) = P(B|A)*P(A) = 0.84*0.65 = 0.55 (2 decimal places)
(e) P(A or B)= 0.68
(f) What is the probability that a new Wing Foot store will not be closed after 2 years?
P[(A or B)] = 0.68
What is the probability that a new Wing Foot store will be closed after 2 years?
P[(A or B)'] = 0.32
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Check these out carefully.
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Cheers,
Stan H.
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