EMV question
Submitted by cplusplus on Fri, 06/25/2010 - 20:02
Paul is a project manager for an industrial design project. The project has a 60% chance of making the company $230,000 over the next year. It has a 40% chance of costing the company $150,000. What’s the project’s EMV?
A $138,000
B $60,000
C $78,000
D $230,000
Need brief justification and explanation.
Thank you all.
Forums:
pkukilla
Sat, 06/26/2010 - 05:27
Permalink
78000
60/100*230000 - 40/100*15000= 78000
EMV will be positive when there is revenue/profit
EMV will be negative when there is expense
So net is 138000 - 60000=78000