Expected Value is used in statistics, gambling, and other domains to measure the expected profitability of a given decision. It is calculated by multiplying each possible outcome by the probability of that outcome occurring, then summing these results:

EV = ∑ [P(x) * X]

• P(x) is the probability of each outcome,
• X is the value of each outcome,
• ∑ indicates the sum across all possible outcomes.

Suppose a person wants to buy a car. The person is trying to choose between a Toyota Camry and a Honda Civic. Some common metrics to consider (the list is shortened for simplicity): initial price, operating costs, resale value, reliability. Comparison below is just an example, it can be extended with other metrics that might impact a decision. For instance, you can weigh your decision with customer satisfaction, or personal preferences.

Factor	Honda Civic	Toyota Camry
Initial Price	$15,000	$18,000
Operating Costs (5 years)	$14,700	$16,400
Resale Value (after 5 years)	-$9,000	-$10,800
Reliability	High (Hondas are known for their reliability)	High (Toyotas are known for their reliability)
Total Cost over 5 years	$20,700	$23,600