Expected Monetary Value

Expected monetary value, abbreviated as EMV, is a tool used to predict how much money will be made by making a specific decision.

 

Expected Monetary Value Formula

\(\large{ EMV =  P \; I  }\)

Symbol

\(\large{ EMV }\) = expected monetary value

\(\large{ I }\) = impact (the amount you will spend if a given identified risk occurs)

\(\large{ P }\) = probability (the liklihood that any event will occur)