Do EMVs Add Up?
Student B asked us:
EMVs are calculated in a cumulative way. You reason forwards left to right along the tree to work out the payoffs and roll back right to left to calculate the EMVs. Have a look at the worked example on Page 10.11 of the Studypack which illustrates this process.
I have a question regarding the EMV - i have calculated an EMV for each project, is it sensible to add the EMV's together? to get the EMV of all three projects? or is it wrong?
EMVs are calculated in a cumulative way. You reason forwards left to right along the tree to work out the payoffs and roll back right to left to calculate the EMVs. Have a look at the worked example on Page 10.11 of the Studypack which illustrates this process.
posted by SuperJane at
08:16
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