A Recent Survey Shows That the Probability of a College

question 126

Multiple Choice

A recent survey shows that the probability of a college student drinking alcohol is 0.6. Further, given that the student is over 21 years old, the probability of drinking alcohol is 0.8. It is also known that 30% of the college students are over 21 years old. The probability of drinking or being over 21 years old is ________.

• A) 0.24.
• B) 0.42.
• C) 0.66.
• D) 0.90.

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Definitions:

Net Present Value

A method used to evaluate investments by calculating the present value of expected future cash flows minus the initial investment cost.

Cash Inflows

Refers to the money received by a company during a particular period, including revenues from sales, investments, and financing activities.

Minimum Acceptable Rate

The lowest rate of return on an investment that a manager or investor is willing to accept.

Investment Decision

The process of making choices about where to allocate funds in various assets with the aim of generating returns over time.