You are the project manager of the NHQ project in Bluewell Inc. The project has an asset valued at $200,000 and is subjected to an exposure factor of 45 percent.
If the annual rate of occurrence of loss in this project is once a month, then what will be the Annual Loss Expectancy (ALE) of the project?
Annual Loss Expectancy (ALE) is calculated using the formula: ALE = SLE * ARO. First, determine the Single Loss Expectancy (SLE), which is the product of the asset value and the exposure factor: SLE = $200,000 * 0.45 = $90,000. Next, calculate the Annual Rate of Occurrence (ARO), which is the number of times the loss is expected to occur in a year. Since the loss occurs once a month, the ARO is 12. Finally, calculate the ALE: ALE = SLE * ARO = $90,000 * 12 = $1,080,000. Thus, the correct Annual Loss Expectancy is $1,080,000.
The answer is $1,080,000.00 NOT $108,000.00
I don't understand how this question is used on every single test bank- Examtopics, Cert Bus, Course Hero... And not one has actually caught/taken the time to correct.
Copy / paste I guess :-)
if it is hard to adjust the answer to be #$ 1,080,000.00; then adjust the asset value in the question to be $20,000.00 :-)
1 080 000