Suppose there is a 20% chance that revenue will exceed expectations, a 10% chance that costs will be lower than expected, and a 25% chance that the number of defective parts will be lower than expected. Assume that all variables are statistically independent. What is the chance that all 3 favorable outcomes occur together?

The chance that all 3 favorable outcomes occur together is 0.005

Step-by-step explanation:

When two events are independent, the probability of both occurring is the product of the probabilities of the individual events. More formally, if events A and B are independent, then the probability of both A and B occurring is:

P (A and B) = P (A) x P (B)

In this case,

P (A) = P (revenue will exceed expectations) = 20%

P (B) = P (costs will be lower than expected) = 10%

P (C) = P (number of defective parts will be lower than expected) = 25%

P (A and B and C) = P (A) x P (B) x P (C)

P (A and B and C) = 0.20x0.10x0.25=0.005