The editor of a text publishing company in USA is trying todecide whether to publish a proposed business statistics book.Information on previous textbooks published indicated that 10% arehuge success, 20% are moderate success, 40% break even and 30% arelosers. However, before publishing decision is made, the text bookswill be reviewed. In the past, 99% of the huge success receivedfavorable reviews, 70% of the moderate success received favorablereviews, 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, showshould the editor revise the probabilities of the various outcomesto take this information into account? Explain.
b. What proportion of textbooks receives favorable reviews?
Please provide excel formulas and your explanation on theQuestion a.
Thank you in advance.
