Question

ABC project consulting firm is considering bidding for two projects (Project A and B). Based on past records, management believes that there is a 60% chance that project A bid will be successful, and a 40% chance that project B bid will be successful. As these two projects are completely different, it may be assumed that the success of one is totally independent of the success of the other. If these two projects are bid for concurrently, what is the probability that both projects bids will be successful?

Answer #1

Probability that project A bid will be successful, P(A) = 60%

Probability that project B bid will be successful, P(B) = 40%

As these two projects are completely different,

and success of one is totally independent of the success of the other.

It means that events of success of each of the projects are mutually exclusive.

Using Bayes' theorem, if these two projects are bid for concurrently, then

probability that both projects bids will be successful,

= 0.6 * 0.4

= 0.24 or 24 %

**-------------------**

**ANSWER: 24 %**

You work for a consulting firm, and have submitted a bid for a
large consulting contract. The firm's management thinks it has a
50-50 chance of landing the project. In a few weeks, the agency to
which the bid was submitted sent in a request for additional
information. The firm's past experience indicates that the agency
asked for additional information for 72.1% of successful bids and
14.5% of unsuccessful bids. What is the probability that this
particular bid will be...

A consulting firm
submitted a bid for a large research project. The firm's management
initially felt they had a 50-50 chance of getting the project.
However, the agency to which the bid was submitted subsequently
requested additional information on the bid. Past experience
indicates that for 79% of the successful bids and 42% of the
unsuccessful bids the agency requested additional information.
a.
What is the prior probability of the bid being successful (that is,
prior to the request for...

A consulting firm submitted a bid for a large research project.
Management felt their probability of winning was 0.75. The agency
reviewing the bid requested additional information on the bid. Past
experience indicates that for 65% of the winning bids and 45% of
the losing bids the agency requested additional information.
Compute the posterior probability that the bid will be successful
given a request for additional information.

A building contractor is preparing a bid on a new construction
project. Two other contractors will be submitting bids for the same
project. Based on past bidding practices, bids from the other
contractors can be described by the following probability
distributions:
Contractor
Probability Distribution of Bid
A
Uniform probability distribution between $570,000 and
$770,000
B
Normal probability distribution with a mean bid of $670,000 and
a standard deviation of $47,000
If required, round your answers to three decimal places.
If...

A firm is considering two mutually exclusive projects (named A
and B). The cash flows in each of two states of the worlds are
provided for each of the projects. The projects cost the same.
Project A
Project B
Boom
Recession
Boom
Recession
Probability
0.6
0.4
0.6
0.4
Cash flow
$200
$100
$220
$60
Payment to debt holders
$100
$100
$100
$50
Distribution to stockholders
$100
$0
$120
$10
3) The value of Project A is _____ and of Project...

Problem 12-18 (Algorithmic)
A building contractor is preparing a bid on a new construction
project. Two other contractors will be submitting bids for the same
project. Based on past bidding practices, bids from the other
contractors can be described by the following probability
distributions:
Contractor
Probability Distribution of Bid
A
Uniform probability distribution between $530,000 and
$730,000
B
Normal probability distribution with a mean bid of $630,000 and
a standard deviation of $43,000
If required, round your answers to three...

Problem 12-18 (Algorithmic)
A building contractor is preparing a bid on a new construction
project. Two other contractors will be submitting bids for the same
project. Based on past bidding practices, bids from the other
contractors can be described by the following probability
distributions:
Contractor
Probability Distribution of Bid
A
Uniform probability distribution between $600,000 and
$800,000
B
Normal probability distribution with a mean bid of $700,000 and
a standard deviation of $50,000
If required, round your answers to three...

Ten firms are considering taking on risky projects. For each, if
the project is not successful, it will fail, and the firm will earn
$0. Probabilities of success, and payoffs if the projects are
successful, are described in the below table:
Firm
Probability of Success (Otherwise, Failure)
Payoff if Successful
A
80%
$5,300
B
70%
$4,800
C
90%
$7,200
D
82%
$5,600
E
100%
$6,500
F
72%
$5,000
G
80%
$5,500
H
94%
$6,850
I
75%
$5,750
J
90%
$6,100...

ABC Telecom has to choose between two mutually exclusive
projects. If it chooses project A, ABC Telecom will have the
opportunity to make a similar investment in three years. However,
if it chooses project B, it will not have the opportunity to make a
second investment. The following table lists the cash flows for
these projects. If the firm uses the replacement chain (common
life) approach, what will be the difference between the net present
value (NPV) of project A...

A firm is considering two mutually exclusive projects (named A
and B). The cash flows in each of two states of the worlds are
provided for each of the projects. The projects cost the same.
Project A
Project B
Boom
Recession
Boom
Recession
Probability
0.6
0.4
0.6
0.4
Cash flow
$200
$100
$220
$60
Payment to debt holders
$100
$100
$100
$50
Distribution to stockholders
$100
$0
$120
$10
In the scenario described above:
A) Shareholders will ask managers to...

ADVERTISEMENT

Get Answers For Free

Most questions answered within 1 hours.

ADVERTISEMENT

asked 3 minutes ago

asked 23 minutes ago

asked 29 minutes ago

asked 30 minutes ago

asked 33 minutes ago

asked 34 minutes ago

asked 37 minutes ago

asked 38 minutes ago

asked 40 minutes ago

asked 41 minutes ago

asked 42 minutes ago

asked 44 minutes ago