Question

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 kept within budget or the campaign will increase sales is _________.

Group of answer choices:
a. 0.20b. 0.32c. 0.40d. 0.88

Answer 1

The probability that the cost is kept within budget or the campaign will increase sales is 0.88.

Step-by-step explanation:

The probability that the cost is kept within budget or the campaign will increase sales is calculated by adding the probabilities of each event happening and subtracting the probability of both events happening at the same time. Since the two events are independent, the probability of both events happening is the product of their individual probabilities.

Probability of cost within budget = 0.40

Probability of campaign increasing sales = 0.80

Probability of cost within budget and campaign increasing sales = 0.40 * 0.80 = 0.32

Probability of cost within budget or campaign increasing sales = Probability of cost within budget + Probability of campaign increasing sales - Probability of cost within budget and campaign increasing sales

= 0.40 + 0.80 - 0.32

= 0.88

Therefore, the probability that the cost is kept within budget or the campaign will increase sales is 0.88.

Answer 2

Answer: b. 0.32

Step-by-step explanation:

Probability of under budget and increase sales:

P(under budget and increase sales) = 0.8*0.4 = 0.32