Question

Using the same facts from the previous problem, how would your answer change if Randy estimates that there is only a 20 percent chance that the position will be sustained upon audit or judicial proceeding?

Answer 1

If Randy estimates that there is only a 20 percent chance that the position will be sustained upon audit or judicial proceeding, it would affect the calculations related to audits in a 20-year period and probabilities of not being audited or being audited more than twice.

Step-by-step explanation:

If Randy estimates that there is only a 20 percent chance that the position will be sustained upon audit or judicial proceeding, it means that he believes there is a lower probability of the position being upheld. This would affect the calculations related to audits in a 20-year period and probabilities of not being audited at all or being audited more than twice.

The number of audits expected in a 20-year period would likely be lower because Randy's estimate suggests a lower chance of sustaining the position upon audit. The probability of not being audited at all would decrease, as there is now a higher likelihood of being audited. Similarly, the probability of being audited more than twice may also decrease due to the lower estimated chance of sustaining the position.