A tax specialist has estimated the probability that a tax return selected at random will be audited is .06. Furthermore, he estimates the probability that an audited return will result in additional assessments being levied on the taxpayer is .50. What is the probability that a tax return selected at random will result in additional assessments being levied on the taxpayer?

Question

Quizplus · Accepted Answer

The probability that a tax return will be audited and result in additional assessments is the product of the probability of being audited (0.06) and the probability of additional assessments given an audit (0.50), which is 0.06 * 0.50 = 0.03.

A Tax Specialist Has Estimated the Probability That a Tax