The conclusion of the argument is "Thus in ninety-nine out of a hundred alerts explosives will actually be present." Although flawed, this is a statistic about alerts that are triggered. Answer choice A is about alerts that are not triggered, so it has nothing to do with the argument presented in the premise.
Answer choice E is correct due to the following.
We are talking about two groups here: bags that contain explosives, and bags that do not. If a bag does not contain explosives, there is a 1% chance that the alarm goes off erroneously. We don't know if the machine ever fails to detect bags that do have explosives, but we don't need to know for this question. Let's assume it's 100%.
The argument is flawed because it fails to account for the size of the groups. If 1,000 bags with no explosives go through the scanner, there will be 10 false alerts. If a single bag of explosives causes an alert, then there is 1 legitimate alert. In this case, only 1/11 alerts were due to explosives present, rather than the 99/100 stated by the conclusion. This is why the percentage is misused in this argument.
