Examining Earned Monetary Value Analysis for Projects
Earned Monetary Value Analysis is a method of calculating the average outcome when the future of a project seems to be uncertain.
You should note that when you are calculating EMV for a project, opportunities will always have a positive value while risk will have a negative value.
Earned Monetary Value is found by multiplying the monetary value of a positive outcome by the probability that it will occur. This is done for all possible outcomes and their figures are added together. The sum is the EMV for the scenario.
The technique is used in decision tree analysis. EMV must be calculated in order for the analysis to find the best outcome. The best outcome is the lowest combination of cost and EMV.
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