Do you need customer support or technical assistance? Click here to submit a support ticket...
  • Page:
  • 1

TOPIC: Question EMV question

EMV question 2 years 5 months ago #6191

  • Ganesh Muniyandy
  • Ganesh Muniyandy's Avatar Topic Author
  • Visitor
  • Visitor
Need answer for the below question which I saw in one of the mobile apps.

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 estimates that there is a 40% chance that the subcontractor will fail to deliver, if that happens, it will cost an additional $15,250 to pay your work engineers to rewrite the work and the delay will cost the company $20,000 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 that team can take advantage of that opportunity. What is the EMV of these two things?

A.-$14,100

B.$6100

C.-$11,175

D.$39,750.

Could you please let me know the answer with an explanation?

Thanks!
Ganesh

EMV question 2 years 5 months ago #6192

  • Rahul Kakkar
  • Rahul Kakkar's Avatar
  • Offline
  • Gold Boarder
  • Gold Boarder
  • Posts: 161
  • Karma: 6
  • Thank you received: 47
Can you quote the name of the mobile app where you got this question?

Answer: C

To calculate the expected monetary value (EMV) of a set of risks and opportunities, multiply each probability by its total cost and add them together. In this question, the cost of the risk is –$15,250 + –$20,000 = –$35,250, so its EMV is 40% x –$35,250 = -$14,100. The value of the opportunity is $4,500 and its probability is 65%, so its EMV is 65% x $4,500 = $2,925. So the total EMV for the two is –$14,100 + $2,925 = –$11,175.
Rahul Kakkar, PMP, MBA
Community Moderator


How are we doing? Your opinion matters. To help us improve, please check out our survey at www.surveymonkey.com/s/pmpexamforum

EMV question 2 years 5 months ago #6193

  • Ganesh Muniyandy
  • Ganesh Muniyandy's Avatar
  • Offline
  • Fresh Boarder
  • Fresh Boarder
  • Posts: 1
  • Thank you received: 0
Thank you Rahul for your answer and explanation.

Name of the mobile app: PMP TEST PREP.
  • Page:
  • 1
Moderators: Yolanda MabutasTimothy EnallsScott GillardMary Kathrine PaduaERIC BARTLETTKevin NasonSteven Mudrinich, PMPMark Wuenscher, PMPJohn WolvertonTracy Shagnea, PMPJada GarrettMark LacattivaPatrick Floris PhD PMPTy Weston, PMPGenevieve Pluviose, PMP

OSP INTERNATIONAL LLC
OSP INTERNATIONAL LLC
Training for Project Management Professional (PMP)®, PMI Agile Certified Practitioner (PMI-ACP)®, and Certified Associate in Project Management (CAPM)®

Login
Boost Your PMP Exam Prep in Only Six Hours! Join the Live PMP Coaching Class on Feb 24/25 for just $79. Learn More...
The PMP Exam is Changing in 2018
Simona and Cornelius
Free Interview - Listen Now

This interview with Simona Fallavollita (LinkedIn Profile) was recorded at the magnificient Project Management Institute (PMI)® Global Conference 2017 in Chicago, Illinois. We discuss the how, what, why and when of the changes that are coming to the PMP exam.

Thank you!
Cornelius Fichtner, PMP, CSM