Decision Tree Analysis Calculator
Advanced decision analysis with expected monetary value and risk assessment
Multiple outcome evaluation
EMV calculations
Probability analysis
Best path identification
Decision Parameters
For present value calculations
Analysis time period
Decision Options
Likelihood of success
Expected financial result
Likelihood of success
Expected financial result
Understanding Decision Tree Analysis
Decision Tree Fundamentals
Expected Monetary Value (EMV)
EMV = Probability × Outcome. This calculation helps quantify the expected value of each decision option when outcomes are uncertain, allowing for data-driven decision making.
Risk Assessment
Analyze the probability of success to understand the risk level of each option. Lower probabilities indicate higher risk, requiring additional mitigation strategies.
Decision Optimization
Compare expected values across all options to identify the optimal decision. Consider both financial returns and risk levels in your final recommendation.
Best Practices
Probability Estimation
Use historical data, expert opinions, and market research to estimate probabilities. Consider multiple scenarios and sensitivity analysis for robust decision making.
Outcome Valuation
Include all relevant costs and benefits in your outcome calculations. Consider intangible benefits and opportunity costs for comprehensive analysis.
Decision Documentation
Document assumptions, data sources, and reasoning behind your decision tree. This provides transparency and supports future decision reviews and learning.