Her Expected Profit is $88 when she sells it at different profits and losses with different probabilities.
Expected Profit: The likelihood of making a profit is multiplied by the payoff's profit to determine expected profit, and the probability that specific costs will be incurred is multiplied by the cost to determine expected cost.
The profit amount is multiplied by the chance of earning that profit to determine the expected profit under a probability demand distribution.
The Expected Maximum Profit measure computes an EMP value that is expressed as a percentage of the total loan amount and measures the incremental profit compared to not creating a credit scoring model. It takes into account the profits received by the non-defaulters and the losses caused by the defaulters.
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