Question:
Expected value can be calculated using a triangular distribution (simple average) or beta distribution (weighted average). The three-point estimating formula that uses a beta distribution is as follows: (Optimistic + Pessimistic + (4 × Most Likely)) ÷ 6. Plug in the values provided to calculate the following: ($25 + $50 + ($35 × 4)) ÷ 6 = $35.8, or 36 when rounded to the nearest whole number.