Final answer:
The value of a safeguard to a company is calculated using the formula: ALE before the safeguard minus the ALE after implementing the safeguard minus the annual cost of the safeguard. This calculation determines the financial benefit of the safeguard by considering the reduction in potential losses and the cost of implementation. The correct answer is Option A.
Step-by-step explanation:
The value of a safeguard to a company is typically calculated by assessing the impact of the safeguard on the company's risk exposure. Specifically, the calculation is done using the Annual Loss Expectancy (ALE) which is a part of a risk assessment process. ALE is the product of the Annual Rate of Occurrence (ARO) and the Single Loss Expectancy (SLE). To calculate the value of a safeguard, you'd typically look at the reduction in the ALE that the safeguard brings about, subtracting any costs associated with implementing the safeguard.
The correct formula is A. ALE before safeguard - ALE after implementing the safeguard - annual cost of safeguard. This calculation aims to show the financial benefit of implementing a safeguard by considering the decrease in potential losses alongside the actual cost to implement that safeguard.
For example, if a company has an ALE of $10,000 before implementing an antivirus program and the ALE reduces to $2,000 after implementing it with an annual cost of the program being $500, the value of the antivirus program to the company is calculated as $10,000 (ALE before) - $2,000 (ALE after) - $500 (annual cost), which equals $7,500.
The final answer to the question is Option A which is ALE before safeguard - ALE after implementing the safeguard - annual cost of safeguard.