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 event occurs is the product of the probabilities that each event does not occur. The probability that sales do not increase is 1 - 0.80 = 0.20, and the probability that the cost is not kept within budget is 1 - 0.40 = 0.60. Since the events are independent, the probability that neither occurs is 0.20 * 0.60 = 0.12.

The Probability That a New Advertising Campaign Will Increase Sales