Computer screening of tax returns is used to flag tax forms that need to be investigated further. The method correctly flags 85% of all erroneous returns and incorrectly flags 5% of error-free returns. The pool of tax returns submitted for computer screening contains 15% with errors. (a) A tax return is randomly screened. What is the probability that it is flagged by the computer and has an error? (b) What is the probability that a random tax form is flagged by the computer? (c) If a tax return is not flagged by the computer, what is the probability that it is correct?

A First Course in Probability (10th Edition)
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Chapter1: Combinatorial Analysis
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Computer screening of tax returns is used to flag tax forms that need to be investigated further. The method
correctly flags 85% of all erroneous returns and incorrectly flags 5% of error-free returns. The pool of tax
returns submitted for computer screening contains 15% with errors.
(a) A tax return is randomly screened. What is the probability that it is flagged by the computer and has an
error?
(b) What is the probability that a random tax form is flagged by the computer?
(c) If a tax return is not flagged by the computer, what is the probability that it is correct?
Transcribed Image Text:Computer screening of tax returns is used to flag tax forms that need to be investigated further. The method correctly flags 85% of all erroneous returns and incorrectly flags 5% of error-free returns. The pool of tax returns submitted for computer screening contains 15% with errors. (a) A tax return is randomly screened. What is the probability that it is flagged by the computer and has an error? (b) What is the probability that a random tax form is flagged by the computer? (c) If a tax return is not flagged by the computer, what is the probability that it is correct?
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