The probability that a new advertising campaign will increase sales is assessed as being 0.80. The probability that the cost of developing the new ad campaign can be kept within the original budget allocation is 0.40. Assuming that the two events are independent, the probability that the cost is not kept within budget or the campaign will not increase sales is
A) 0.12.
B) 0.32.
C) 0.68.
D) 0.88.

Question

Quizplus · Accepted Answer

The probability that the cost is not kept within budget is 1 - 0.40 = 0.60. The probability that the campaign will not increase sales is 1 - 0.80 = 0.20. Since the events are independent, the probability that either the cost is not kept within budget or the campaign will not increase sales is 1 - (0.40 * 0.80) = 0.68.

The Probability That a New Advertising Campaign Will Increase Sales