The chance of a hard drive failure is once every three years. The cost to buy a new hard drive is $300. It will require 10 hours to restore the OS and software to the new hard disk. It will require a further 4 hours to restore the database from the last backup to the new hard disk. The recovery person earns $10/hour. Calculate the SLE, ARO, and ALE. Assume the EF = 1 (100%). What is the closest approximate cost of this replacement and recovery operation per year?

$1,320

$100

$440

$145

Explanation

AV (Asset value) = $300 + (14 * $10) = $440 - the cost of a hard drive plus the work of a recovery person, i.e.how much would it take to replace 1 asset? 10 hours for resorting the OS and soft + 4 hours for DB restore multiplies by hourly rate of the recovery person.
SLE (Single Loss Expectancy) = AV * EF (Exposure Factor) = $440 * 1 = $440
ARO (Annual rate of occurrence) = 1/3 (every three years, meaning the probability of occurring during 1 years is 1/3)
ALE (Annual Loss Expectancy) = SLE * ARO = 0.33 * $440 = $145.2 ~~$145