How To Calculate Risk Assesment

lets say for example you are working on Risk Assessment for your company's technology assets. What formula do you use to calculate how much it would cost per year if you had to replace or repair an asset?

Here is the Formula:

ARO X SLE = ALE

Risk assessment involves looking at your assets and determining how often they might be at risk. First, you determine the likelihood of a risk occurring in a year, which is called the Annualized Rate of Occurrence(ARO)

Then you determine how much it would cost to replce the asset if it were lost or to repair the damages. This dollar value, which would also inlcude lost sales and other costs, is called the Single Loss Expectancy (SLE)

You use the ARO and SLE to calculate the Annual Loss Expectancy (ALE) you can use the following formula:

server might be at risk 4 times a year ........... ARO = 4
The Cost to replace/repair it would be $5,000 .... SLE = $5,000
4 X 5000 = 20,000 ................................ ALE = $20,000

Again the formula is:
ARO X SLE = ALE