Expected Monetary Value EMV Analysis

Expected monetary value (EMV) analysis is a statistical technique that calculates the average, anticipated future impact of the decision. EMV is calculated by multiplying the probability of the risk by its impact for two or more potential outcomes (for example, a good outcome and a poor outcome) and then adding the results of the potential outcomes together. EMV is used in conjunction with the decision tree analysis technique, which is covered next. I'll give you an example of the EMV formula in the next section. Positive results generally mean the risks you're assessing pose opportunities to the project, while negative results generally indicate a threat to the project.

Project Management Made Easy

Project Management Made Easy

What you need to know about… Project Management Made Easy! Project management consists of more than just a large building project and can encompass small projects as well. No matter what the size of your project, you need to have some sort of project management. How you manage your project has everything to do with its outcome.

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