An industrial manufacturing firm operates an edge computing controller managing automated … — CompTIA Security+

An industrial manufacturing firm operates an edge computing controller managing automated assembly lines, valued at an Asset Value ( $AV$ ) of $\$500,000$ . Security assessments indicate an unmitigated Exposure Factor ( $EF$ ) of $0.40$ ( $40\%$ ) with an Annual Rate of Occurrence ( $ARO$ ) of $0.5$ for hardware failure caused by power anomalies. To reduce risk, the organization evaluates a high-availability failover appliance costing $\$30,000$ annually, which would lower the Exposure Factor to $0.10$ ( $10\%$ ) without affecting the $ARO$ . What is the net annual financial benefit of implementing this risk mitigation control?

$\$45,000$ Answer
B
$\$75,000$
C
$\$120,000$
D
$\$25,000$

Answer

The net annual financial benefit of implementing the safeguard is

\$45,000

To find the net annual financial benefit of a security control, first calculate the initial Annual Loss Expectancy (

ALE_{initial} = AV \times EF_{initial} \times ARO = \$500,000 \times 0.40 \times 0.5 = \$100,000

). Next, calculate the residual Annual Loss Expectancy (

ALE_{mitigated} = AV \times EF_{mitigated} \times ARO = \$500,000 \times 0.10 \times 0.5 = \$25,000

). Subtracting the mitigated ALE from initial ALE yields an annual gross loss reduction of

\$75,000

. Subtracting the annual safeguard cost of

\$30,000

from the gross reduction results in a net annual benefit of

\$45,000

Step-by-Step Solution

Calculate initial Single Loss Expectancy (SLE) and Annual Loss Expectancy (ALE)

Initial

SLE = \$500,000 \times 0.40 = \$200,000

; Initial

ALE = \$200,000 \times 0.5 = \$100,000

Quantifies the annual financial impact of the unmitigated risk prior to implementing controls.

Calculate post-mitigation Single Loss Expectancy (SLE) and Annual Loss Expectancy (ALE)

Mitigated

SLE = \$500,000 \times 0.10 = \$50,000

; Mitigated

ALE = \$50,000 \times 0.5 = \$25,000

Quantifies the residual annual financial impact expected with the safeguard active.

Calculate Annual Loss Reduction and Net Financial Benefit

Gross Loss Reduction =

\$100,000 - \$25,000 = \$75,000

. Net Financial Benefit =

\$75,000 - \$30,000 = \$45,000

Subtracts the annual cost of the safeguard control from the overall annual loss reduction to determine net value.

Key Concept

Quantitative Risk Assessment and Safeguard Cost-Benefit Analysis (ALE = AV * EF * ARO)

Estimated Time:1m 30s

Question

Answer

Step-by-Step Solution

Key Concept

Common Mistakes

Topics

More questions from this topic