A Multinational oil company is considering setting up asubsidary in Jamaica, the

Question

A Multinational oil company is considering setting up asubsidary in Jamaica, they realise that the success depends in part on the ensuing political climatein Jamaica.Management estimates the probability of successin terms of resulting revenues from subsidary during its first year of operation, is 0.55 if the prevailing political condition is favourable, 0.30 if the political condition is neutral and 0.10 if the prevailing political condition is unfavourble. they further estimate the probability of favourable , neutral and unfavourable as 0.6, 0.2 and 0.2 respectively.What is the probability of success of the new subsidary?

Explanation / Answer

probability of success of the new subsidary = 0.6*0.55+0.2*0.30+0.2*0.10 = 0.41

So, Probability of success of the new subsidary is 0.41

Related Questions

Navigate

• Browse (All)
• Browse A
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.