Before you start: Distinguish an uncertain event from an issue that has already happened.
Try it
An event has a 25% chance of costing 40,000. A response costs 5,000 and reduces the chance to 10%. What is the net expected benefit?
Your reasoning, assumptions and units:
Apply it to your work
Describe a comparable situation. What evidence would you need before using this reasoning to make a decision?
Your example and next check:
Answer and reasoning
0.25 × 40,000 − 0.10 × 40,000 − 5,000 = 1,000. That is an expected benefit, not a guarantee. Check response effectiveness and the remaining downside.
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