Calculate the contribution from the first outcome

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Reference no: EM133982858

Problem

To calculate the Expected Monetary Value (EMV) of the risk, we use the formula: EMV=(P1×V1)+(P2×V2) where: P1 and P2 are the probabilities of each outcome. V1 and V2 are the respective cost impacts (with their values, noting that negative impacts represent costs). Given Data: Cost Impact if the risk occurs with a 40% probability: V1=-60,000 (cost) P1=0.40. Get the instant assignment help. Cost Impact if the risk occurs with a 60% probability: V2=-100,000 (cost) P2=0.60 Step-by-Step Calculation: Calculate the contribution from the first outcome: Calculate the contribution from the second outcome: Sum the contributions to find the EMV: Conclusion: The Expected Monetary Value (EMV) of the risk, assuming you plan to mitigate this risk, is: This value represents the expected cost due to the risk based on the given probabilities and impacts.

Reference no: EM133982858

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