Lighter Than Air Industries expects that it would lose $10 million if a tornado struck its aircraft operations facility. It expects that a tornado might strike the facility once every 100 years. What is the single loss expectancy for this scenario?

Question

Business

Matteo Pope

7 May, 19:05

Lighter Than Air Industries expects that it would lose $10 million if a tornado struck its aircraft operations facility. It expects that a tornado might strike the facility once every 100 years. What is the single loss expectancy for this scenario?

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Answers (1)

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Paula Ellison · Answer 1

Single loss expectancy = $10,000,000

Explanation:

Given:

Loss of amount if tornado hit = $10,000,000

Single loss expectancy = ?

Computation of Single loss expectancy:

Single loss expectancy = Assets value * Exposure factor

Single loss expectancy = $10,000,000 * 1

Single loss expectancy = $10,000,000

Annual loss expectancy = Assets value / Expected year

Annual loss expectancy = $10,000,000 / 100

Annual loss expectancy = $100,000