The probability that a new advertising campaign will increase sales is estimated to be 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) 0.88.
B) 0.32.
C) 0.12.
D) 0.68.

Question

Quizplus · Accepted Answer

Let A = probability that the new advertising campaign will increase sales 
Let B = probability that the cost of developing the new ad campaign can be kept within the original budget allocation 
We are given that P(A) = 0.80 and P(B) = 0.40, and we know that the two events are independent.

The probability that neither event occurs is given by: 
P(A' ∩ B') = P(A') * P(B') 
= (1 - P(A)) * (1 - P(B))  [using the complement rule] 
= (1 - 0.80) * (1 - 0.40) 
= (0.20) * (0.60) 
= 0.12

Therefore, the probability that neither the cost is kept within budget nor the campaign will increase sales is 0.12.

The Probability That a New Advertising Campaign Will Increase Sales