Welcome, Guest
Do you need customer support or technical assistance? Click here to submit a support ticket...

TOPIC: EMV question

EMV question 1 year 1 month ago #6191

  • Ganesh Muniyandy
  • Ganesh Muniyandy's Avatar
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?





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


EMV question 1 year 1 month ago #6192

  • Rahul Kakkar
  • Rahul Kakkar's Avatar
  • Offline
  • Moderator
  • Posts: 131
  • Thank you received: 33
  • Karma: 1
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 1 year 1 month ago #6193

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

Name of the mobile app: PMP TEST PREP.
Moderators: Yolanda Mabutas, Ahmed Amin, Michael DeCicco, Rahul Kakkar, Fernando Jr Sinlao Lim, Jeremy Raelin, Mary Kathrine Padua, Yasir Mehmood, Chris Preziotti, Lazard Toe, ITBMC, MPM, CIPM, PMP, ITIL, Christian Winter, Kevin Nason, Michael Sumaquial, PMP, Mark Wuenscher, PMP