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TOPIC: Risk Quantitative Analysis discussion

Risk Quantitative Analysis discussion 3 years 6 months ago #9949

  • Ha TR
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I'm trying to solve this question from HeadFirst Labs book, but I believe the answer the book is saying is incorrect. I think the answer should be a +30.7 and not -30.7, please let me know your thoughts on this:

Prob Imp
35% cost $48 to replace equipment
5% lose $750 in damage costs
15% save $800 in battery costs
10% cost $350 for last-minute rental

What is total EMV? The book says it should be a "-$30.70" and that if you add $30.7 to your budget you will account for risks? I am struggling with this, I think you should not reduce budget at all in this case since in fact you get a saving of $30.7 cumulative EMV of the risks. Let me know your thoughts please.
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