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Controls R Us, Inc. is trying to decide whether to install a security system in its showroom to reduce the probability of a catastrophic theft,
Controls R Us, Inc. is trying to decide whether to install a security system in its showroom to reduce the probability of a catastrophic theft, which could result in losses of 850,000. Local crime statistics suggest that the probability of a theft at Controls is 7%. However, companies with security systems only have about a 2% probability of catastrophic theft. The present value of purchasing and installing a security system and paying future security costs is estimated at $43,000. What should Controls R Us do? Justify your response with a cost-benefit analysis prepared in Excel and uploaded here
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