Compute the revised estimate of expected loss

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Reference no: EM133360033

Two years has passed since the launch of the start up company- Smartwear. The owner and manager of Smartwear realized that the company is facing an internal control issue which can be remedied using advanced technology. The IT consultant estimates that the impact associated with this problem is $1 million and that the likelihood of this occurring is 3%. Two manually exclusive IT projects have been proposed to deal with this problem. IT projects-A would cost $10,000 and reduce the likelihood to 1.5%, while IT projects-B would cost $17,000 and reduce the likelihood to 1%. If both procedures were implemented, the likelihood would be reduced to 0.1%

A) What is estimate expected loss associated with Smartwear internal control problems before and IT projects intervention is implemented?

B) Compute the revised estimate of expected loss if IT projects-A were implemented, if IT projects-B were implemented, and if both projects were implemented

C) compared the estimate cost and benefit of IT projects-A, IT projects-B, and both IT projects combined. If consider only the estimated of cost and benefit, which procedure should be implemented

Reference no: EM133360033

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