Expected Monetary Value Calculator

✖Probability represents the probability of the ith outcome occurring.ⓘ Probability [Po]			+10% -10%
✖Impact is the financial result of the outcome and can range from any negative number to any positive number, depending on if the impact is positive or negative on the firm’s bottom line.ⓘ Impact [Imp]			+10% -10%

✖Expected Monetary Value represents the average financial outcome when considering the probability of various possible outcomes occurring.ⓘ Expected Monetary Value [EMV]

⎘ Copy

👎

Formula

✖

Expected Monetary Value

Formula

`"EMV" = multi("Po","Imp")`

Example

`"78000"=multi("0.6","130000")`

Calculator

LaTeX

Reset

👍

Download Capital Budgeting Formulas PDF PDF Image

Expected Monetary Value Solution

STEP 0: Pre-Calculation Summary

Formula Used

Expected Monetary Value = multi(Probability,Impact)
EMV = multi(Po,Imp)
This formula uses 1 Functions, 3 Variables

Functions Used

multi - Multiplication is the process of calculating the product of two or more numbers., multi(a1, …, an)

Variables Used

Expected Monetary Value - Expected Monetary Value represents the average financial outcome when considering the probability of various possible outcomes occurring.
Probability - Probability represents the probability of the ith outcome occurring.
Impact - Impact is the financial result of the outcome and can range from any negative number to any positive number, depending on if the impact is positive or negative on the firm’s bottom line.

STEP 1: Convert Input(s) to Base Unit

Probability: 0.6 --> No Conversion Required
Impact: 130000 --> No Conversion Required

STEP 2: Evaluate Formula

Substituting Input Values in Formula

EMV = multi(Po,Imp) --> multi(0.6,130000)

Evaluating ... ...

EMV = 78000

STEP 3: Convert Result to Output's Unit

78000 --> No Conversion Required

FINAL ANSWER

78000 <-- Expected Monetary Value

(Calculation completed in 00.004 seconds)

You are here -

Home » Financial » Financial Accounting » Capital Budgeting » Expected Monetary Value

Credits

Created by Vishnu K

BMS College of Engineering (BMSCE), Bangalore

Vishnu K has created this Calculator and 200+ more calculators!

Verified by Kashish Arora

Satyawati College (DU), New Delhi

Kashish Arora has verified this Calculator and 50+ more calculators!

< 18 Capital Budgeting Calculators

Overall Cost of Capital

Go Overall Cost of Capital = (Market Value of the Firm’s Equity)/(Market Value of the Firm’s Equity+Market Value of the Firm’s Debt)*Required Rate of Return+(Market Value of the Firm’s Debt)/(Market Value of the Firm’s Equity+Market Value of the Firm’s Debt)*Cost of Debt*(1-Tax Rate)

Discounted Payback Period

Go Discounted Payback Period = ln(1/(1-((Initial Investment*Discount Rate)/Periodic Cash Flow)))/ln(1+Discount Rate)

Net Present Value (NPV) for even cash flow

Go Net Present Value (NPV) = Expected Cash Flow*((1-(1+Rate of Return)^-Number of Periods)/Rate of Return)-Initial Investment

Capital Asset Pricing Model

Go Expected Return on Investment = Risk Free Rate+Beta on Investment*(Expected Return on Market Portfolio-Risk Free Rate)

Double Declining Balance Method

Go Depreciation Expense = (((Purchase Cost-Salvage Value)/Useful Life Assumption)*2)*Beginning PP&E Book Value

Modified Internal Rate of Return

Go Modified Internal Rate of Return = 3*((Present Value/Cash Outlay)^(1/Number of Years)*(1+Interest)-1)

Cost of Retained Earnings

Go Cost of Retained Earnings = (Dividend/Current Stock Price)+Growth Rate

After-Tax Cost of Debt

Go After Tax Cost of Debt = (Risk Free Rate+Credit Spread)*(1-Tax Rate)

Beginning Inventory

Go Beginning Inventory = Cost of Goods Sold-Purchases+Ending Inventory

Terminal Value using Perpetuity Method

Go Terminal Value = Free Cash Flow/(Discount Rate-Growth Rate)

Trade Discount

Go Trade Discount = multi(List Price,Trade Discount Rate)

Expected Monetary Value

Go Expected Monetary Value = multi(Probability,Impact)

Accounting Rate of Return

Go Accounting Rate of Return = (Average Annual Profit/Initial Investment)*100

Inventory Carrying Cost

Go Inventory Carrying Cost = (Total Carrying Cost/Total Inventory Value)*100

Certainty Equivalent Cashflow

Go Certainty Equivalent Cashflow = Expected Cash Flow/(1+Risk Premium)

Payback Period

Go Payback Period = Initial Investment/Cashflow per Period

Terminal Value using Exit Multiple Method

Go Terminal Value = EBITDA at Last Period*Exit Multiple

Cost of Debt

Go Cost of Debt = Interest Expense*(1-Tax Rate)

Expected Monetary Value Formula

Expected Monetary Value = multi(Probability,Impact)
EMV = multi(Po,Imp)

What us Expected Monetary Value?

Expected Monetary Value (EMV) is a fundamental concept in decision theory and risk analysis, particularly in the context of project management and financial decision-making. It provides a quantitative measure of the potential value or outcome associated with uncertain events or scenarios. EMV is calculated by multiplying the value of each possible outcome of an uncertain event by its probability of occurrence and summing these products.
In practical terms, Expected Monetary Value enables decision-makers to evaluate the potential outcomes of a decision or project in monetary terms, accounting for both the likelihood of occurrence and the associated financial impact. By considering all possible outcomes and their probabilities, decision-makers can make more informed choices that maximize expected value or utility.
For instance, in project management, various risks and uncertainties may impact project outcomes, such as cost overruns, delays, or changes in market conditions.

How to Calculate Expected Monetary Value?

Expected Monetary Value calculator uses Expected Monetary Value = multi(Probability,Impact) to calculate the Expected Monetary Value, The Expected Monetary Value is a concept commonly used in decision theory and risk analysis to quantify the potential outcomes of uncertain events or decisions in terms of their monetary value. Expected Monetary Value is denoted by EMV symbol.

How to calculate Expected Monetary Value using this online calculator? To use this online calculator for Expected Monetary Value, enter Probability (Po) & Impact (Imp) and hit the calculate button. Here is how the Expected Monetary Value calculation can be explained with given input values -> 78000 = multi(0.6,130000).

FAQ

What is Expected Monetary Value?

The Expected Monetary Value is a concept commonly used in decision theory and risk analysis to quantify the potential outcomes of uncertain events or decisions in terms of their monetary value and is represented as EMV = multi(Po,Imp) or Expected Monetary Value = multi(Probability,Impact). Probability represents the probability of the ith outcome occurring & Impact is the financial result of the outcome and can range from any negative number to any positive number, depending on if the impact is positive or negative on the firm’s bottom line.

How to calculate Expected Monetary Value?

The Expected Monetary Value is a concept commonly used in decision theory and risk analysis to quantify the potential outcomes of uncertain events or decisions in terms of their monetary value is calculated using Expected Monetary Value = multi(Probability,Impact). To calculate Expected Monetary Value, you need Probability (Po) & Impact (Imp). With our tool, you need to enter the respective value for Probability & Impact and hit the calculate button. You can also select the units (if any) for Input(s) and the Output as well.

Home

FREE PDFs

🔍 Search