Question $2$: Consider this scenario: A financial services company has a large database of customer information, including sensitive financial data. The company wants to assess the risk associated with a potential data breach and evaluate the cost$-$effectiveness of implementing additional security controls.

The value of the customer database is estimated to be $$5$ million, and the company has $50,000$ customers. The company has experienced one data breach in the past five years, resulting in a loss of $$1$ million. The company estimates that the probability of a data breach in any given year is $0\mathrm{.}05(5\%).$

The company is considering implementing two security controls:

A firewall upgrade that will reduce the probability of a data breach by $50\%,$ at a cost of $$500,000.$

A data encryption system that will reduce the impact of a data breach by $80\%,$ at a cost of $$1$ million.

The company wants to determine whether it should invest in these security controls.

Please calculate the following:

Single Loss Expectancy $($SLE$),$ Annualized Rate of Occurrence $($ARO$),$ Annualized Loss Expectancy $($ALE$),$ the cost of controls $1$ and $2,$ and savings with controls $1$ and $2?$