Exam PMI-RMP topic 1 question 183 discussion

D. US$20,000 profit The expected monetary value (EMV) of a project is a measure of the expected value of a potential outcome, calculated by multiplying the probability of that outcome occurring by the monetary value associated with it. In this case, the project has a 60% chance of a US$100,000 profit and a 40% chance of a US$100,000 loss. To calculate the EMV, we can use the following formula: EMV = (Probability of Profit x Monetary Value of Profit) + (Probability of Loss x Monetary Value of Loss) Plugging in the values from the problem statement, we get: EMV = (0.6 x US$100,000) + (0.4 x -US$100,000) EMV = US$60,000 + -US$40,000 EMV = US$20,000 Therefore, the EMV for this project is US$20,000. This means that, on average, the project is expected to generate a profit of US$20,000.