While performing a cost-benefit analysis, the Product Owner of a project determined that the project...

The technique described is Expected Monetary Value (EMV). EMV translates an uncertain event into a monetary risk exposure by multiplying its probability of occurrence by its financial impact.

For the scenario:

EMV = Probability × Monetary Impact

EMV = 0.45 × (-$800,000) = -$360,000

The negative sign represents an expected loss. Thus, the risk contributes an expected monetary exposure of $360,000 to the economic analysis of the project. EMV is particularly useful when comparing uncertain alternatives or integrating risk into business-justification calculations.

A Probability Impact Grid classifies risks according to probability and impact, typically for prioritization; it does not primarily calculate monetary expectation. Pareto Analysis identifies the relatively small number of causes responsible for the largest proportion of effects. A Risk Breakdown Structure categorizes risks hierarchically according to source or similarity.

Because the question explicitly supplies both a percentage probability and a monetary loss, EMV is the technique being applied.

Study Guide reference: Business Justification/Risk - > Risk Assessment Techniques - > Expected Monetary Value; financial analysis of uncertainty.

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