You are an advisory board member for a local charity The cha

You are an advisory board member for a local charity. The charity has been given a new server, and members plan to use it to connect their 24 client computers to the Internet for email access. Currently, none of these computers has antivirus software installed. Your research indicates that there is a 95% chance these systems will become infected after email is in use. A local vendor has offered to sell 25 copies of antivirus software to the nonprofit organization for $400. Even though the nonprofit’s 10 paid employees make only about $9 an hour, there’s a good chance that a virus could bring down the network for an entire day. They would like you to tell them what the ALE for this proposed change would be. How will you answer them?

A. $423

B. $950

C. $720

D. $684

Solution

D. The formula for the annual loss expectancy is this:

ALE × ARO = SLE, or .95 × 720 = $684

Annual rate of occurrence is 95%, or .95

Single loss expectance is ($9 per hour × 8 hours) × 10 employees = $720

Therefore, the nonprofit could expect to lose $684 by not using antivirus software.