The CFO of PKD Corporation is very uncomfortable with its current risk exposure related to the possibility of business disruptions. Specifically, PKD is heavily involved in E-business, and its internal information sys- tems are tightly interlinked with its key customers' systems. The CFO has estimated that every hour of system downtime will cost the company about $10,000 in sales. The CFO and CIO have further estimated that if the system were to fail, the average downtime would be one hour per inci- dent. They have anticipated that PKD will likely experience 50 downtime incidents in a given year due to internal computer system problems and another 50 incidents per year due to external problemsspecifically, sys- tem failures with the Internet service provider (ISP). Currently, PKD pays an annualized cost of $150,000 for redundant computer and communica- tion systems, and $100,000 for ISP support just to keep the total expected number of incidents to 100 per year. Required: A. Given the information provided thus far, how much ($) is the com- pany's current expected residual risk? B. A further preventive control would be to purchase and maintain more redundant computers and communication lines where possible, at an annualized cost of $100,000, which would reduce the expected number of downtime incidents to 15 per year due to internal com- puter system problems. What would be the dollar amount of PKD's current residual expected risk at this point