Risk Exposure Calculator

EMV represents an average expected cost across many hypothetical repetitions of the project, but in any single real project, risks either happen at their full impact or don't happen at all — they don't arrive in neatly averaged fractional amounts. The 20% buffer acknowledges that a reserve sized to the bare statistical average would frequently prove insufficient the moment even one risk actually materializes.

Yes — a risk with a 50% chance of a $40,000 impact and a risk with a 10% chance of a $200,000 impact both produce a $20,000 EMV, even though they represent very different risk profiles: one is a moderate, fairly likely cost and the other is a severe but unlikely one. EMV is useful precisely because it lets you compare these on a single scale, but it's worth remembering that identical EMV numbers can hide very different underlying risk shapes worth managing differently.

No — the project budget only affects the contingency percentage figure, showing what share of the budget the total EMV represents, but it has zero effect on the total EMV or recommended contingency amounts themselves, which are calculated purely from each risk's own probability and impact. A larger budget simply makes the same dollar amount of risk exposure look like a smaller percentage of the whole.

The average risk score is scaled relative to whichever of the three entered risks has the single largest financial impact, so a genuinely severe risk can still show a modest relative score if an even larger risk is also present in the list, and a risk's raw EMV dollar figure can tell a different prioritization story than its relative score does. Reviewing both the dollar-based EMV figures and the relative risk score together, rather than either one alone, gives a fuller picture for deciding where to focus mitigation effort.