You have determined that it will cost about R100 000 to implement a security control that might eliminate an identified risk (e.g. loss of laptops in your organisation). Historical data suggests that 15 laptops on average are stolen every two years, and one laptop costs about R10 000. Using a quantitative analysis approach, show why it would be useful or not to implement the suggested security control. Note: (show all calculations)
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You have determined that it will cost about R100 000 to implement a security
control that might eliminate an identified risk (e.g. loss of laptops in your
organisation). Historical data suggests that 15 laptops on average are stolen
every two years, and one laptop costs about R10 000. Using a quantitative
analysis approach, show why it would be useful or not to implement the
suggested security control. Note: (show all calculations)
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- Q1. Suppose XYZ Software Company faces the threats given in the following table. Using the table, calculate the ARO and ALE for each threat category that XYZ Software Company faces. Threat Category Cost per Incident (SLE) Frequency of Occurrence Programmer mistakes $5,000 1 per week Loss of intellectual property $75,000 1 per year Assume a year has passed and XYZ has improved security by applying a number of controls. Using the information from the following table, calculate the post-control ARO and ALE for each threat category listed. Cost per Incident Frequency of Cost of Threat Category Occurrence Control Type of Control Programmer mistakes $5,000 1 per month $20,000 Training Loss of intellectual property $75,000 1 per 2 years $15,000 Firewall/IDS Calculate the Cost Benefit Analysis (CBA) for each threat category. For each threat category, determine if the proposed control is worth the costs.2. As information becomes increasingly available additional storage is needed for the handling of client's insurance capacities. Short Stop is looking to modernise the hardware in which they store the data. Under the proposed idea, Short Stop would purchase dedicated virtual servers and cloud storage which costs $50,000 per year, indefinitely, from the end of year 2 onward (as it takes a year to implement this change). If implemented this would result in an immediate cost saving of $500,000. Short Stop has estimated that it could invest this money elsewhere, as an alternative, at 8% p.a. From a business perspective describe the concept of time value of money in such a way that your description sheds light on how businesses come to financial investment decisions or how investments today can be valued in the future. In the discussion your manager wants a clear description on the benefits of this concept for the business (or any business).(Related to Checkpoint 11.2) (Calculating EAC) Barry Boswell is a financial analyst for Dossman Metal Works, Inc. and he is analyzing two alternative configurations for the firm's new plasma cutter shop. The two alternatives, denoted A and B below, will perform the same task, but alternative A will cost $95,000 to purchase, while alternative B will cost only $55,000. Moreover, the two alternatives will have very different cash flows and useful lives. The after-tax costs for the two projects are as follows: E a. Calculate each project's EAC, given a discount rate of 10 percent. b. Which of the alternatives do you think Barry should select? Why? - X Data Table a. Alternative A's EAC at a discount rate of 10% is $. (Round to the n Year Alternative A Alternative B S(55,000) (6,500) (6,500) (6,500) S(95,000) (21,000) 1 2 (21,000) 3 (21,000) 4 (21,000) (21,000) (21,000) (21,000) (Click on the icon O in order to copy its contents into a spreadsheet.) 5 6 7
- (Related to Checkpoint 11.2) (Calculating EAC) Barry Boswell is a financial analyst for Dossman Metal Works, Inc. and he is analyzing two alternative configurations for the firm's new plasma cutter shop. The two alternatives, denoted A andB below, will perform the same task, but alternative A will cost $75,000 to purchase, while alternative B will cost only $65,000. Moreover, the two alternatives will have very different cash flows and useful lives. The after-tax costs for the two projects are as follows: a. Calculate each project's EAC, given a discount rate of 11 percent. b. Which of the alternatives do you think Barry should select? Why?Cryptocurrency Finder is buying the first computer for their new server farm. Suppose the company paid $5,000for this computer, which it expects to last for three years. Describe how the company would account for the $5,000 expenditure under (a) the cash basis and (b) the accrual basis. State in your own words why the accrual basis is more realistic for this situation.Star Inc asked you to evaluate their internal control systems. You believed that Star Inc. has serious flaws in their internal control system. You estimated that the impact associated with this problem is $10 million and that the likelihood is currently 9%. Three procedures can be used to deal with this problem. Procedure A would cost $300,000 and reduce the likelihood to 5%; procedure B would cost $400,000 and reduce the likelihood to 3%. If both procedures were implemented, likelihood would be reduced to 1%. a. What is the estimated expected loss associated with ABC Corporation's internal control problem before any new internal control procedures are implemented? b. Determine which procedure should be implemented. Use computation to support your answer. (
- 2. The Anderson Machine Company's main product is a GPS tracking device that is only one square inch in size but can be tracked on the internet from nearly any location in the world. Their device is relatively new and is still working out some problems, but there are no other GPS trackers in the world that are as small in size as Anderson's device. Investors in Anderson told the company they expected to earn a risk-adjusted return of 12% on their investment, and the device has been profitable with a 7% return on investment. From a VRIS perspective, which of the following is a correct description of Anderson's situation? (F&E) The device is valuable, rare, and difficult to copy, but has a lot of substitutes so the company has a temporary competitive advantage The device is valuable but not rare, so the company is experiencing competitive parity O None of these are correct The device is valuable and rare and a source of competitive advantage The device is not considered to be valuable…Your company is evaluating two cloud-based secured data storage services. "Great Sky," the newer service, claims its uploading and downloading speeds are faster than the older service, "Clear and Steady Skies." You need to make a decision based on published access times for both services at different times and for varying file sizes. To make your decision, you purchase two statistical studies from which you discover the average download time for Great Sky is 0.67 sec. per MB and for Clear Steady Skies is 0.84. Additionally, the studies indicate the following sample information: NGS = 60 ncss = 50, SGS = 0.25 and scss = 0.55. Use a = .05, and the five step hypothesis testing procedure to make the appropriate decision.aper Submarine Manufacturing is investigating a lockbox system to reduce its ollection time. It has determined the following: Average number of payments per day Average value of payment Variable lockbox fee (per transaction) Daily interest rate on money market securities The total collection time will be reduced by three days if the lockbox system is adopted. a. What is the PV of adopting the system? (Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.) b. What is the NPV of adopting the system? (Do not round intermediate calculations 435 $845 $15 068% and round your answer to the nearest whole number, e.g., 32.) c. What is the net cash flow per day from adopting? Per check? (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.) a. PV b. NPV c. Net cash flow c.Net cash flow per day per check
- Groove Street Games (GSG) is developing a new free-to-play, massive multiplayer online crime simulator game and wishes to create a simulation model to estimate the expected NPV of the game. GSG faced several uncertain factors and made the following assumptions that would hopefully help them build a simulation model. • Product Life: It is equally likely that the game will stay operational for 1, 2, 4, 6, or 8 years, but there is a 10% possibility that the game will stay operational for the next 10 years. • Microtransaction Rate: GSG estimates that there is a 50% chance that at least 30% of the players would purchase at least one in-game cash item, but there is also an equal chance that the number would fall below 10%. GSG is confident that the distribution of the microtransaction rate closely resembles a bell shape. • Market Share: GSG believes its market share in year 1 would be at best 70%, most likely 35%, and at worst 10%. • Server Maintenance Cost: The annual server maintenance…(Related to Checkpoint 13.3) (Scenario analysis) Family Security is considering introducing tiny GPS trackers that can be inserted in the sole of a child's shoe, which would then allow for the tracking of that child if he or she was ever lost or abducted. The estimates, that might be off by 12 percent (either above or below), associated with this new product are shown here:. Since this is a new product line, you are not confident in your estimates and would like to know how well you will fare if your estimates on the items listed above are 12 percent higher or 12 percent lower than expected. Assume that this new product line will require an initial outlay of $1.17 million, with no working capital investment, and will last for 10 years, being depreciated down to zero using straight-line depreciation. In addition, the firm's required rate of return or cost of capital is 10.3 percent, and the firm's marginal tax rate is 34 percent. Calculate the project's NPV under the "best-case…(Related to Checkpoint 13.3) (Scenario analysis) Family Security is considering introducing tiny GPS trackers that can be inserted in the sole of a child's shoe, which would then allow for the tracking of that child if he or she was ever lost or abducted. The estimates, that might be off by 11 percent (either above or below), associated with this new product are shown here: Since this is a new product line, you are not confident in your estimates and would like to know how well you will fare if your estimates on the items listed above are 11 percent higher or 11 percent lower than expected. Assume that this new product line will require an initial outlay of $1.17 million, with no working capital investment, and will last for 10 years, being depreciated down to zero using straight-line depreciation. In addition, the firm's required rate of return or cost of capital is 10.1 percent, and the firm's marginal tax rate is 34 percent. Calculate the project's NPV under the "best-case scenario"…
