A project has the following risks. 40% chance of schedule delay costing $3,000 20% chance of success of a new methodology saving $4,000 a 50% chance of a legal obligation which costs $3,000 a 50% chance of unexpected savings of $10,000 What is the expected monetary value of this project?     $20,000     $8,000     -$1,400     $3,100

Practical Management Science
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ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter2: Introduction To Spreadsheet Modeling
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A project has the following risks.

  • 40% chance of schedule delay costing $3,000
  • 20% chance of success of a new methodology saving $4,000
  • a 50% chance of a legal obligation which costs $3,000
  • a 50% chance of unexpected savings of $10,000

What is the expected monetary value of this project?

   

$20,000

   

$8,000

   

-$1,400

   

$3,100

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