The probability that a new advertising campaign will increas

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 and the campaign will increase sales is: (Select the correct answer from the choices below.)

A. 0.20

B. 0.32

C. 0.40

D. 0.88

Solution

P(Both) = P(A) * P(B) (using independence)

= 0.8 * 0.4 = 0.32