Question

The chair of the board of directors says, “There is a 50 percent chance this company will earn a profit, a 30 percent chance it will break even, and a 20 percent chance it will lose money next quarter.” a. Use an addition rule to find the probability the company will not lose money next quarter. b. Use the complement rule to find the probability it will not lose money next quarter

Answer 1

The probability that the company will not lose money next quarter using both addition and complement rules is 0.8.

Calculation of a Probability Using Addition and Complement Rules

Let:

P(E) = The probability that the company will earn a profit next quarter = 50%, or 0.50

P(B) = The probability that the company will break even next quarter = 30%, or 0.30

P(L) = The probability the company will lose money next quarter = 20%, or 0.20

P(NL) = The probability the company will not lose money next quarter = ?

Therefore, we have:

a. The probability the company will not lose money next quarter using addition rule can be calculated as follows:

P(NL) = P(E) + P(B) = 0.5 + 0.3 = 0.8

b. The probability the company will not lose money next quarter using complement rule can be calculated as follows:

P(NL) = 1 – P(L) = 1 – 0.2 = 0.8

Learn more about the complement rule here: https://brainly.com/question/13655344.