QUESTION 7 You have a data store valued at $500,000 and you wish to determine wh

Question

QUESTION 7

You have a data store valued at $500,000 and you wish to determine what type of fire suppression system is best. You have retrieved the following facts from the actuary database: Exposure Factor: 40% Expected Rate of Occurrence: Once every 10 years You have two options: Halon Gas and CO Halon Gas: $20K initially plus $5k annually for each of the 5 years of its useful life. Will reduce exposure to 10% CO2: $5K initially plus $10k annually for each of the 5 years of its useful life. Will reduce exposure to 20%

5 year loss expectancy with no countermeasure: ________________________________.

5 year loss expectancy with Halon: ________________________________?.

5 year loss expectancy with CO2: ________________________________.

Total savings with Halon: ________________________________.

Total loss with CO2: ________________________________.

Explanation / Answer

5 year loss expectancy with no countermeasure = 0.4 * 500000 * 0.5 = 100000

5 year loss expectancy with Halon = 0.1 * 500000 * 0.5 + 20000 + 25000 = 70,000

5 year loss expectancy with Halon = 0.2 * 500000 * 0.5 + 5000 + 50000 = 105000

Total savings with halon = 30000
Total loss with CO2 = 5000

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