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 11 months ago

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