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Expected Monetary value

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riyadhmuhammed
Posts: 6
Joined: Wed Jan 25, 2017 9:18 am

Expected Monetary value

Postby riyadhmuhammed Mon Jul 10, 2017 9:02 am

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
Expert
Posts: 2210
Joined: Sat Jan 04, 2014 3:55 pm

Re: Expected Monetary value

Postby manishpn Tue Jul 11, 2017 2:26 pm

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
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Contributor
Posts: 239
Joined: Sun Feb 26, 2017 6:06 am

Re: Expected Monetary value

Postby nazrulq Sun Jul 16, 2017 6:32 am

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

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