Question

In: Statistics and Probability

The editor of a text publishing company in USA is trying to decide whether to publish...

The editor of a text publishing company in USA is trying to decide whether to publish a proposed business statistics book. Information on previous textbooks published indicated that 10% are huge success, 20% are moderate success, 40% break even and 30% are losers. However, before publishing decision is made, the text books will be reviewed. In the past, 99% of the huge success received favorable reviews, 70% of the moderate success received favorable reviews, 40% of the break-even books received favorable reviews, and 20% of the losers received favorable reviews

a. If the proposed textbook receives a favorable review, show should the editor revise the probabilities of the various outcomes to take this information into account? Explain.

b. What proportion of textbooks receives favorable reviews?

Please provide excel formulas and your explanation on the Question a.

Thank you in advance.

Solutions

Expert Solution

orchestra answered 1 year ago
Next > < Previous

Related Solutions

The editor of a textbook publishing company is trying to decide whether to publish a proposed...
The editor of a textbook publishing company is trying to decide whether to publish a proposed business statistics textbook. Information on previous textbooks published indicate that 10 % are huge​ successes, 20 % are modest​ successes, 40 % break​ even, and 30 % are losers.​ However, before a publishing decision is​ made, the book will be reviewed. In the​ past, 96 % of the huge successes received favorable​ reviews, 60 % of the moderate successes received favorable​ reviews, 50 %...
The editor of a textbook publishing company is trying to decide whether to publish a proposed...
The editor of a textbook publishing company is trying to decide whether to publish a proposed business statistics textbook. Information on previous textbooks published indicate that 10% are huge​ successes, 20% are modest​ successes, 40% break​ even, and 30 % are losers.​ However, before a publishing decision is​ made, the book will be reviewed. In the​ past, 99 %of the huge successes received favorable​ reviews, 60% of the moderate successes received favorable reviews, 50 % of the​ break-even books received...
Embassy Publishing Company received a six-chapter manuscript for a new college text- book. The editor of...
Embassy Publishing Company received a six-chapter manuscript for a new college text- book. The editor of the college division is familiar with the manuscript and estimated a 0.65 probability that the textbook will be successful. If successful, a profit of $600,000 will be realized. If the company decides to publish the textbook and it is unsuccessful, a loss of $200,000 will occur. Before making the decision to accept or reject the manuscript, the editor is consider- ing sending the manuscript...
On-line Text Co. has four new text publishing products that it must decide on publishing to...
On-line Text Co. has four new text publishing products that it must decide on publishing to expand its services. The firm's WACC has been 17%. The projects are of equal risk, ßs of 1.6. The risk-free rate is 7% and the market rate is expected to be 12%. The projects are expected to earn as follows: i. Project W: 14% ii. Project X: 18% iii. Project Y: 17% iv. Project Z: 15% Justify which projects should be selected and give...
The Merriweather Printing Company is trying to decide on the merits of constructing a new publishing...
The Merriweather Printing Company is trying to decide on the merits of constructing a new publishing facility. The project is expected to provide a series of positive cash flows for each of the next four years. The estimated cash flows associated with this project are as​ follows: Year Project Cash Flow 0           ​ ? 1 ​$760,000 2   420,000 3   310,000 4   470,000 If you know that the project has a regular payback of 2.6 years, what is the​ project's IRR?...
The Merriweather Printing Company is trying to decide on the merits of constructing a new publishing...
The Merriweather Printing Company is trying to decide on the merits of constructing a new publishing facility. The project is expected to provide a series of positive cash flows for each of the next four years. The estimated cash flows associated with this project are as​ follows: Year Project Cash Flow 0           ​ ? 1 ​$780,000 2   350,000 3   270,000 4   510,000 If you know that the project has a regular payback of 3 ​years, what is the​ project's IRR?...
A company is trying to decide whether to bid for a certain contract or not. They...
A company is trying to decide whether to bid for a certain contract or not. They estimate that merely preparing the bid will cost $10000.If their company bids, then they estimate that there is a 50% chance that their bid will be put on the “short-list;” otherwise their bid will be rejected. Once “short-listed” the company will have to supply further detailed information (entailing costs estimated at $5000). After this stage their bid will either be accepted or rejected. The...
You are the editor of a publishing company and are careful to register all of your...
You are the editor of a publishing company and are careful to register all of your books with the U.S. Copyright Office. One of your star authors, Jackie Yolan, just published his latest crime mystery, “Seven Ways to Get Away.” The new book is popular in the United States, and you are interested in distributing the novel abroad. You soon learn that a company in India is publishing a very similar book in the Hindi language. You believe the book...
Suppose an editor of a publishing company claims that the mean time to write a textbook...
Suppose an editor of a publishing company claims that the mean time to write a textbook is at most 15 months. A sample of 16 textbook authors is randomly selected and it is found that the mean time taken by them to write a textbook was 12.5. Assume also that the standard deviation is known to be 3.6 months. Assuming the time to write a textbook is normally distributed and using a 0.05 level of significance, would you conclude the...
The management of VITULLO Company is trying to decide whether to continue manufacturing a part or...
The management of VITULLO Company is trying to decide whether to continue manufacturing a part or to buy it from an outside supplier. The part, called FIZBE, is a component of the company’s finished product.          The following information was collected from the accounting records and production data for the year ending December 31, 2017. 5,000 units of FIZBE were produced in the machining department. Variable manufacturing costs applicable to the production each FIZBE unit were: direct materials $4.75, direct labor...
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT