ACMEs storage facility has been valued at $400,000 and it is estimated that if a flood took place it would damage 35 percent of the facility. The local governments statistics indicate that a flood has the probability of happening once in 10 years. What are the SLE and ALE values?

A.
SLE = $140,000 ALE = $14,000

B.
SLE = $35,000 ALE = $3,500

C.
SLE = $14,000 ALE = $140,000

D.
SLE = $3,500 ALE = $35,000

Explanation:
The SLE is the asset value multiplied by the exposure factor, which is
$400,000 x 35% which would be a total SLE of $140,000. The ALE is the annual loss
expectancy. The formula is SLE multiplied by ARO (single loss expectancy times the
annual rate of occurrence), which would be $140,000 x .1 (once every 10 years) for a
value of $14,000.