Expected Monetary Value (EMV) Calculator for project risks

Understanding the expected monetary value (EMV) calculator — concept and principle

This calculator applies expected monetary value analysis to a list of project risks. For each risk you enter a probability and an impact, negative for threats and positive for opportunities; it then totals the EMV, separates threats from opportunities, suggests a contingency reserve and identifies the largest risk. Project managers use it in quantitative risk analysis and to size budget reserves.

Risk = chance × money — with the default inputs: −$12,000.

How it is calculated

EMV of one risk = probability × impact
Total EMV = sum over all risks
EMV of threats = sum of negative EMVs; EMV of opportunities = sum of positive EMVs
Suggested contingency reserve = the negative total, shown as a positive amount (0 if the total is positive)
Largest risk = the line with the largest EMV in absolute value

Enter each risk on its own line: name, probability %, impact, with no thousands separators.

The principle

EMV is a probability-weighted average. If a risk has a 30% chance of costing 20,000, then over many similar projects it would cost on average 0.3 × 20,000 = 6,000 per project. Adding the EMVs of independent risks gives the expected net effect of all of them, which is why a negative total is often used to size a contingency reserve. In decision trees, the same idea compares options: each option's cost plus the EMV of the risks that follow it, choosing the best.

Worked example

Defaults: supplier delay 30%, −20,000; key engineer leaves 10%, −50,000; exchange rate moves in our favour 25%, +12,000; permit rejected 5%, −80,000.

EMVs: −6,000; −5,000; +3,000; −4,000.
Threats = −6,000 − 5,000 − 4,000 = -$15,000; opportunities = $3,000.
Total EMV = −15,000 + 3,000 = -$12,000.
Suggested contingency reserve = $12,000.
Largest risk by EMV: Supplier delay; risks counted: 4.

How to read the result

EMV is a long-run average, not what will happen. Any single risk either happens with its full impact or not at all. Here the permit risk has a smaller EMV than the supplier delay, but if it happens it costs 80,000, far more than the 12,000 reserve. Use EMV to rank risks and size a pooled reserve, and handle rare high-impact risks with mitigation, insurance or a separate management reserve.

Common mistakes

Entering threats as positive numbers.
Using thousands separators, which the parser reads as extra numbers.
Treating the reserve as enough to cover the worst single risk.
Adding risks that are not independent, such as two that can only both happen together.

Keep in mind: Probabilities and impacts are estimates, often subjective. Review them as the project progresses; the result is a planning aid, not a guarantee.

Frequently asked questions

How is EMV used to set contingency?

The total negative EMV of identified risks is a common basis for the contingency reserve, adjusted for the organisation's risk appetite.

Can EMV be positive?

Yes, when opportunities outweigh threats. The suggested reserve is then zero.

What is the difference between EMV and a decision tree?

A decision tree uses EMV at each branch to compare alternative choices and select the one with the best expected value.

Sources: Project Management Institute, A Guide to the Project Management Body of Knowledge (PMBOK Guide), quantitative risk analysis

Checked 9 Nov 2026. Standard formula: expected monetary value = probability × impact, summed over risks (quantitative risk analysis; decision-tree analysis).

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