Existing virus$-$protection programs rely on virus databases that constantly need to be updated as new viruses emerge. A typical virus$-$protection site license costs $$3,000$ per year for sites of less than $350$ machines and must be updated regularly. Regular updating of the databases costs around $$60$ per computer per year. Furthermore, even with regular updating of the databases, there is a possibility that unaccounted viruses will infect a company$$s computer systems. Virus$-$protection experts estimate that with current virus protection software the probability that a company will experience one complete system breakdown because of a virus within one year is $8\%.$ Of the $8\%$ of companies who experience a system breakdown, $25\%$ also experience a second breakdown sometime thereafter. The probability of more than two breakdowns is virtually zero.

A complete system breakdown, which typically lasts one day, would cost $$35,000$ to a retail company with $175$ machines and $$90,000($in profits from lost sales$)$ to a typical financial services company with the same number of machines.

McBug Software Inc. is about to introduce new virus$-$protection software called HackOff. HackOff is based on a $$mutating$-$virus$-$simulator$($MVS$),$ which according to McBug is going to revolutionize the virus$-$protection landscape. The MVS essentially eliminates the need to update virus databases continually. Moreover, the MVS is extremely powerful and, as a result, increases the probability of detecting infected files. Researchers at McBug estimate that companies equipped with HackOff have only a $1\%$ probability of experiencing a virus$-$caused complete system breakdown within a year, and a zero probability of experiencing more than one of such breakdowns.

While the price of a HackOff site$-$license remains to be set, it is estimated that clients who adopt the software would incur start$-$up costs $($excluding the site license$)$ of $$35$ per machine in installation, configuration, training, etc.

Assuming no other costs of virus infection or software, calculate the economic value of HackOff over the course of one year:

$1.$ for a retail company with $175$ machines running under existing virus$-$protection software.

$2.$ for a typical financial services company with $175$ machines running under existing virus$-$protection software.

$3.$ McBug$$s CEO wants your advice about how to price HackOff. What do you recommend the CEO do$?($Your recommendation must include a suggestion about pricing and a brief justification.$)$

Please provide calculations and excel if available$/$used$.$