SOFTWARE PROJECT MANAGEMENT
RISK MANAGEMENT
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Question
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Question 49 of 100Question ID:613084A project has a 90% chance of making $200, 000 profit and a 10% chance of incurring a loss of $50, 000.If you calculate the expected monetary value, what is the expected outcome of the project?
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AProfit
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BLoss
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CCannot be determined
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DBreak even
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Explanation:
Detailed explanation-1: -1. A project has a 60% chance of a $100, 000 profit and a 40 percent of a US $100, 000 loss. The Expected Monetary Value for the project is: $100, 000 profit.
Detailed explanation-2: -To figure this out, you calculate the EMV by multiplying the value of each possible outcome (impact) by its likelihood of occurrence (probability) and then adding the results-which leads us back to our original topic. A common use of EMV is found in decision tree analysis.
Detailed explanation-3: -Probability of risk = 5% Financial impact of risk = 25, 000. EMV = Probability x Impact. 22-Jun-2022
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