About Expected Cost Calculator (Formula)
The Expected Cost Calculator is a tool used to estimate the average cost based on potential costs and their associated probabilities. It is particularly useful in risk analysis, financial planning, and decision-making scenarios.
The formula used to calculate the Expected Cost is:
Expected Cost (EC) = Maximum Cost * Probability of Cost / 100
In this formula, the Maximum Cost represents the maximum potential cost in a given scenario, and the Probability of Cost represents the likelihood or probability of incurring that cost as a percentage.
By applying these values to the formula, the calculator determines the Expected Cost, which represents the average cost that can be anticipated based on the potential costs and their corresponding probabilities.
This calculator simplifies the process of estimating the average cost, providing a convenient tool for risk assessment, financial forecasting, and decision-making. It helps individuals and businesses make informed decisions by considering both the potential costs and their probabilities.