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 neither the cost is kept within budget nor the campaign will increase sales is
A) 0.12.
B) 0.32.
C) 0.68.
D) 0.88.

Question

Quizplus · Accepted Answer

The probability that neither the cost is kept within budget nor the campaign will increase sales is the probability that the cost is not kept within budget multiplied by the probability that the campaign will not increase sales. Since the two events are independent, this is equal to (1 - 0.40) * (1 - 0.80) = 0.12.

The Probability That a New Advertising Campaign Will Increase Sales