Its time for an advertising firm to renew its contract with

It\'s time for an advertising firm to renew its contract with a client. The advertising firm wants the client to increase the amount it spends to advertise. If the firm proposes to continue the current contract, there\'s a 40% chance that the client will accept the proposal. To increase the business will require a second proposal that has a 40% chance of approval. Alternatively, the advertising firm can begin the negotiations by proposing an elaborate advertising campaign. If it takes this approach, there\'s a 20% chance that the client will approve the expanded proposal without needing a second proposal. Which approach should the advertising firm take if it wants to grow the business? Identify any assumptions you\'ve made.

Assuming that the events of the client accepting the proposal to renew the current contract and the client accepting the second proposal are (A. Independent, B. Dependent, or C. Disjoint) the advertising firm should adopt the approach involving (A. the two proposals or B. the single proposal) because the chance of growing the business with the two-proposal approach is __% which is (A. greater or B. less) than the chance of growing the business with the single-proposal approach. (Type an integer or decimal.)

Solution

Assuming that the events of the client accepting the proposal to renew the current contract and the client accepting the second proposal are ( A. Independent, the advertising firm should adopt the approach involving A. the two proposals because the chance of growing the business with the two-proposal approach is 40__% which is (A. greater than the chance of growing the business with the single-proposal approach.