Question

15. There is a 90% chance that XYZ corporations will have enough financial liquidity to survive COVID 19. In addition, there is a 65% chance that enough customers will come back soon enough that the company will have enough income to remain a going concern. What is the probability that the company will have enough liquidity and enough customers will return for the company to remain a going concern?

Answer 1

Given

There is a 90% chance that XYZ corporations will have enough financial liquidity to survive COVID

there is a 65% chance that enough customers will come back soon enough that the company will have enough income to remain a going concern.

we have two independent events

Let event the event Enough Financial Liquidity be P(A) = 90% = 90/100 = 0.9

Let event the event Enough Customers come back soon be P(A) = 65% = 65/100 = 0.65

Now we are required to find out What is the probability that the company will have enough liquidity and enough customers will return for the company to remain a going concern?

This is also known as joint probability

P(A,B) = P(A) * P(B) = 0.9 * 0.65 = 0.585 =58.5%