You are managing a website development project using some ne

You are managing a website development project using some new technologies. The computer programmers you have chosen are fairly new to these technologies. There is a 10% chance they will not be able to properly finish the site, and you\'ll have to scrap their work and start over from scratch. If the programmers will cost $100,000 total to develop this site, what is the expected value of the risk that they will not be able to complete the site?

Solution

Probability of incomplete/incorrect website = 10% = 0.1

Cost of project = 100000 $

Expected value of risk = 0.1*100000 = 10000 $