What is annualized loss expectancy of flood at data center

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A cloud service provider operates a data center that, if destroyed, would cost $20 million to rebuild. It is located in a flood zone and experts determined that a typical flood would cause about $4 million worth of damage to the data center. They also determined that a flood is likely to occur every 50 years. Based on these facts:

1. What is the exposure factor for the effect of a flood on the data center?

2. What is the annualized rate of occurrence of a flood at the data center?

3. What is the annualized loss expectancy of a flood at the data center?

Write your answer, showing all calculations and explanations.

Reference no: EM132090831

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