The Probability That a New Advertising Campaign Will Increase Sales

question 83

Multiple Choice

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

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Definitions:

Temporary Difference

Refers to differences between the carrying amount of an asset or liability in the balance sheet and its tax base that will result in taxable or deductible amounts in future periods.

Straight Line Depreciation

A method of allocating the cost of a tangible asset over its useful life in equal annual amounts.

Capital Cost Allowance

A tax deduction in Canada for the depreciation of tangible property.

Deferred Tax

A tax liability or asset that arises due to temporary differences between the book value and tax value of assets and liabilities.