A particular shoe franchise 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 store grosses over $940,000 its first year. Let B be the event that a store grosses over $940,00 its second year. The franchise 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 the franchise provided the following information: 67% of all the franchise stores show a profit the first year; 73% of all the franchise stores show a profit the second year (this includes stores that did not show a profit the first year); however, 85% of the franchise stores that showed a profit the first year also showed a profit the second year. Compute the following. (Enter your answers to four decimal places.) (a) P(A or B) (b) What is the probability that a new store will not be closed after 2 years? (c) What is the probability that a new store will be closed after 2 years?
Contingency Table
A contingency table can be defined as the visual representation of the relationship between two or more categorical variables that can be evaluated and registered. It is a categorical version of the scatterplot, which is used to investigate the linear relationship between two variables. A contingency table is indeed a type of frequency distribution table that displays two variables at the same time.
Binomial Distribution
Binomial is an algebraic expression of the sum or the difference of two terms. Before knowing about binomial distribution, we must know about the binomial theorem.
A particular shoe franchise knows that its stores will not show a profit unless they gross over $940,000 per year. Let A be the
(a) P(A or B)
(b) What is the probability that a new store will not be closed after 2 years?
(c) What is the probability that a new store will be closed after 2 years?
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