## Expected Monetary value

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Joined: Wed Jan 25, 2017 9:18 am

### Expected Monetary value

Q : You are managing a software engineering project when two team members come to you with a conflict. The lead developer has identified an important project risk: you have a subcontractor that may not deliver on time. The team estimate there is a 40% chance that the subcontractor will fail to deliver. If it happens, it will cost an additional \$15250 to pay engineers to rewrite the work, and the delay will cost the company \$ 20000 in lost business. Another team member points out an opportunity to save money an another area to offset the risk: if an existing component can be adapted, it will save the project \$ 4500 in engineering costs. There is a 65 % probability that the team can take advantage of that opportunity. What is the expected monetary value (EVM) of these two things?

A . \$ -14100
B. \$ 6100
C. \$ 11175
D. \$ 39750

Ans is C.

Kindly help for the calculation
manishpn
Expert
Posts: 2374
Joined: Sat Jan 04, 2014 3:55 pm

### Re: Expected Monetary value

we encourage the students to do the math by yourself and lets than discuss.

If you get ready answer for maths you will not be able to learn
Br,
Manish P
PMP, PMI - ACP, SAFe Agilist
http://www.izenbridge.com/blog/7-effect ... ification/
nazrulq
Contributor
Posts: 266
Joined: Sun Feb 26, 2017 6:06 am

### Re: Expected Monetary value

usually that type of question does n't come to the actual PMP exam . Decision build or buy type or calculate EVM etc.