1. Suppose XYZ Software Company has a new application development project with projected revenues of $1.2 million. Using the following table, calculate the ARO and ALE for each threat category the company faces for this project.

\begin{tabular}{|l|r|l|} \hline Threat Category & CostperIncident(SLE) & FrequencyofOccurrence \\ \hline Programmer mistakes & $5,000 & 1 per week \\ \hline Loss of intellectual property & $75,000 & 1 per year \\ \hline Software piracy & $500 & 1 per week \\ \hline Theft of information (hacker) & $2,500 & 1 per quarter \\ \hline Theft of information (employee) & $5,000 & 1 per 6 months \\ \hline Web defacement & $500 & 1 per month \\ \hline Theft of equipment & $5,000 & 1 per year \\ \hline Viruses, worms, Trojan horses & $1,500 & 1 per week \\ \hline Denial-of-service attacks & $2,500 & 1 per quarter \\ \hline Earthquake & $250,000 & 1 per 20 years \\ \hline Flood & $250,000 & 1 per 10 years \\ \hline Fire & $500,000 & 1 per 10 years \\ \hline \end{tabular}