researchers have developed models based on financial ratios that predict whether a company will go bankrupt over the next 12 months. in a test of the model, the model correctly predicted bankruptcy of firms that did fail 85% of the time. if also correctly predicted non-bankruptcy for 75% of firms that didn't fail. suppose we assume 8% of all firms will go bankrupt this year. your firm was just predicted to go bankrupt :(. what is the probability it actually will go bankrupt?
