Estimate the probability using bayes theorem

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Reference no: EM1316073

You are the production manager for ING Oil and Gas Exploration examining a candidate site. Assume that oil either exists in producible quantities or does not exist at all. Similar site have yielded oil about 20% of the time.

A test is performed on the soil at the site. In the past, oil was present 90% of the times that the test indicated "oil." Conversely, oil was actually present 15% when the test results indicated "no oil"

If a single test is run and indicates that oil is present, what is the revised probability that oil is actually present?

Reference no: EM1316073

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