QUESTION 4 Each month Dun & Bradstreet reports on various companies and rates ea

Question

QUESTION 4 Each month Dun & Bradstreet reports on various companies and rates each company Net Income as being either profitable or unprofitable. In a recent report, Dunn & Bradstreet summarized its findings about 110 aerospace companies and 110 food retailers in the following table: Company Type Aerospace company Food retailer Unprofitable 10 100) Profitable 100) 10 If we randomly select one of the total of 220 companies, what is the probability that this randomly- selected company is unprofitable, given that it is an aerospace company? 0.25 O 0.008 0.05 O 0.09 0.45 0.01

Explanation / Answer

Given that it is an aerospace company, probability that the selected company is unprofitable is computed as:

= ( Number of aerospace companies which are unprofitable ) / Total number of aerospace companies

= 10 / 110

= 0.0909

Therefore 0.0909 is the required probability here.

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