The chance of a hard drive failure is once every three years. The cost to buy a new hard drive is $300. It will
require 10 hours to restore the OS and software to the new hard disk. It will require a further 4 hours to restore
the database from the last backup to the new hard disk. The recovery person earns $10/hour. Calculate the
SLE, ARO, and ALE. Assume the EF = 1 (100%).
What is the closest approximate cost of this replacement and recovery operation per year?
A.
$146
B.
$1320
C.
$440
D.
$100
Explanation:
The annualized loss expectancy (ALE) is the product of the annual rate of occurrence (ARO) and the single
loss expectancy (SLE).Suppose than an asset is valued at $100,000, and the Exposure Factor (EF) for this asset is 25%. The single
loss expectancy (SLE) then, is 25% * $100,000, or $25,000.
In our example the ARO is 33%, and the SLE is 300+14*10 (as EF=1). The ALO is thus: 33%*(300+14*10)
which equals 146.
https://en.wikipedia.org/wiki/Annualized_loss_expectancy