A utility estimates that a payment-portal outage would cost $50,000 in lost fees and overtime (SLE) and expects such an outage twice per year (ARO = 2). What is the ALE?
Select an answer to reveal the explanation.
Short Explanation
ALE is just SLE times how often it happens each year. Fifty thousand dollars times two hits a year is one hundred thousand dollars of expected annual pain—simple multiplication, not a new formula from outer space.
Full Explanation
Annualized loss expectancy equals single loss expectancy multiplied by annualized rate of occurrence (ALE = SLE × ARO). With SLE of $50,000 and ARO of 2, ALE is $100,000. That figure supports comparing the cost of mitigations to expected yearly loss for the payment system.