Weight outcomes by probability to find the expected monetary value of a decision.
Please do not make financial decisions based on these results.
What is the EMV Calculator – Expected Monetary Value?
Weight outcomes by probability to find the expected monetary value of a decision. To use the EMV Calculator – Expected Monetary Value, enter outcome 1 probability, outcome 1 payoff, outcome 2 probability, outcome 2 payoff, outcome 3 probability, outcome 3 payoff; it returns expected monetary value, total probability, and shows them instantly as you type.
Where the EMV Calculator – Expected Monetary Value fits
Weight outcomes by probability to find the expected monetary value of a decision. The main figure it returns is the Expected monetary value, worked out from the values you enter.
It belongs with the other business planning tools. If you are comparing options or checking a result from another angle, try the Software Contract Value Calculator, Accumulated Depreciation Calculator or the Break-even Calculator.
How to use the EMV Calculator – Expected Monetary Value
- Enter your numbers. Start with Outcome 1 probability (%), Outcome 1 payoff ($), Outcome 2 probability (%), then fill in Outcome 2 payoff ($), Outcome 3 probability (%), Outcome 3 payoff ($). Use figures from the same period (same month, quarter or year) for every field. Fields marked optional can stay at zero.
- Read the result. The highlighted box gives the Expected monetary value, and the cards below show Total probability. Tables and charts break it down further.
- Test other scenarios. Results update as you type. Change one value at a time to see what drives the answer, and press Reset to go back to the defaults.
Formula and how it works
Example with real numbers
Here is the EMV Calculator – Expected Monetary Value using the default values shown in the calculator above:
Inputs
| Outcome 1 probability (%) | 30 |
|---|---|
| Outcome 1 payoff ($) | 100,000 |
| Outcome 2 probability (%) | 50 |
| Outcome 2 payoff ($) | 20,000 |
| Outcome 3 probability (%) | 20 |
| Outcome 3 payoff ($) | -40,000 |
Results
| Expected monetary value | $32,000.00 |
|---|---|
| Total probability | 100% |
With these inputs the calculator returns Expected monetary value: $32,000.00. Change any value in the calculator to see how the result moves.
What if you change one input?
Sensitivity check: raising Outcome 1 probability (%) from 30 to 36 (about 20% higher) and leaving everything else as in the example above changes the results like this:
| Result | Example | After the change | Change |
|---|---|---|---|
| Expected monetary value | $32,000.00 | $38,000.00 | +18.8% |
| Total probability | 100% | 106% | +6% |
The input that moves the result most is the one to check twice. Change it in the calculator above to test your own case.
What the results tell you
The results panel of the EMV Calculator – Expected Monetary Value reports Expected monetary value and total probability. Compare these figures while changing one input at a time, and use the related calculators below to look at the same situation from another angle.
Method and limits. This calculator applies the formula in the section above to your inputs, in your browser; nothing you enter is stored on our servers. The result is only as accurate as the numbers you enter and the formula shown above. It is for information, not financial, tax or legal advice.
Frequently asked questions
How is EMV used in project risk?
Teams multiply each risk or opportunity by its probability to compare options and set contingency reserves.
Are the results forecasts?
No. They apply the formula shown to the numbers you enter, so the output is only as realistic as your assumptions.
What is the most important number for a new business?
Cash runway. A profitable plan still fails if cash runs out first, so check burn rate and break-even together.
Are the results guaranteed?
No. Results depend entirely on the numbers you enter and the formulas shown on this page. Please do not make financial decisions based on them alone; confirm important figures with a licensed professional.
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