Question

Consider the following scenario: The asset value of your company's primary servers is $2 million and they are housed in a single office building in Anderson, Indiana. You have field offices scattered throughout the United States, so the servers in the main office account for approximately half the business. Tornados in this part of the country are not uncommon, and it is estimated one will level the building every 60 years. Which of the following is the SLE for this scenario?

Answer 1

The SLE for the scenario with servers valued at $2 million, accounting for half the business in a building at risk of being leveled by a tornado once every 60 years, is calculated as $16,700.

Step-by-step explanation:

The Single Loss Expectancy (SLE) for the scenario described is the cost of the asset ($2 million) times the exposure factor. Since the servers account for approximately half the business, and a tornado is estimated to level the building once every 60 years, the SLE would be the actual value of the asset at risk multiplied by the annualized rate of occurrence (ARO).

To calculate the ARO, we take 1 (tornado) divided by 60 (years), resulting in an ARO of approximately 0.0167. Therefore, the SLE would be $2 million (value of the server) times 0.5 (since it accounts for half the business) times 0.0167 (ARO), which gives us an SLE of $16,700.

The SLE for the scenario with servers valued at $2 million, accounting for half the business in a building at risk of being leveled by a tornado once every 60 years, is calculated as $16,700.