Expected monetary value?

Expected monetary value (EMV) is a statistical concept used in decision analysis to calculate the average outcome of a decision or project in terms of its monetary value. It is calculated by multiplying the probability of each possible outcome by its corresponding monetary value, and then summing up these values.

The formula for calculating EMV is:

EMV = (P1 * V1) + (P2 * V2) + ... + (Pn * Vn)

Where:
- EMV is the expected monetary value
- P1, P2, ..., Pn are the probabilities of each possible outcome
- V1, V2, ..., Vn are the monetary values associated with each outcome

By calculating the EMV, decision-makers can assess the potential financial impact of different options and make informed decisions based on the expected monetary value.

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