Cost benefit calculations – mod 1 slp (need back today)


This assignment requires you to do a cost and benefit analysis for the following company. You will need to study carefully the cost and benefit calculation section at “Home” of module 1.

Ebidding company has a ecommerce website that generate $500,000 per year. Calculate the annualized rate of occurrence (ARO) and annualized loss expectancy (ALE) for each risk:

CategoryCost per incidentFrequency of occurrenceProgramming errors$1,0002 per weekInformation theft(hacker)$2,0001 per quarterInformation theft(employee)$5,0001 per yearViruses$1,0001 per yearDenial of service attacks$3,5001 per 6 monthNatural diaster$100,0001 per 20 years

Note: read background materials, and also make sure to convert frequency of occurrence to yearly base.

One year past, calculate the cost and benefit of controls that have been in place.

Cost per incident
Frequency of occurrence
Cost of controlType of controlProgramming errors$1,0002 per week$2500TrainingInformation theft(hacker)$2,0001 per quarter$10,000FirewallInformation theft(employee)$5,0001 per year$10,000Physical securityViruses$1,0001 per year$10,000Anti-virusDenial of service attacks$3,5001 per 6 month$10,000FirewallNatural diaster$100,0001 per 20 years$15,000Insurance

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