Your client, Virus-Victim, Inc. (VVI), has suffered an attack. The company sells popular retail items only via the Internet to customers all over the world. The perpetrator has been identified and local law enforcement and the county prosecutor are handling the criminal action.

VVI believes that the perpetrator has the deep pockets to compensate VVI for its losses associated with the attack. The perpetrator committed the act at 12:01 am Saturday, July 4th and the retail website was down for 8 hours. At 12:01 am, alarms triggered and the Director of Information Technology (IT) and 10 IT programmers worked all weekend long, 20 hours, to restore and remediate the attack.

1. and 2. VVIs supervisor from information technology and an accounting clerk have assembled the following lists of costs:

• The IT Director earns a salary of $175,000 annually.
• Each IT person earns $40 per hour; IT personnel work scheduled shifts to provide 24 hour coverage; each of the 10 IT programmers had worked 40 hours the prior week and worked their scheduled 40 hours the week after the incident.
• The companys cost for benefits is approximately 25%.
• The police and prosecutor believe that the perpetrator worked alone, but his daughter works for VVI IT and earns $50 per hour and is normally scheduled for 40 hours per week. She averages 10 hours of overtime each week. The company put her on paid-administrative leave starting, Monday, July 6. She was paid administrative leave until police arrested her father on August 3, 28 days later. The daughter and VVI worked out an exit compensation package, where the daughter resigned immediately on August 3 and was paid for her expected earnings for 20 weeks.
• IT Department utilities and nonpersonnel operational costs for the month of the attack were approximately on budget of $500,000, though 5% higher than the prior year. Operational costs equal $672 per hour during the month of July.
• As part of the remediation process, the company purchased a redundant server. The cost of the server, peripherals, and software totaled $75,000.
• After the attack, the company purchased a new software protection package for $100,000 to prevent future attacks, similar to then July 4th attack.

1. Assuming that ALL costs above are damages, estimate incremental costs to VVI.
2. Assuming that true incremental costs to remediate and restore the Internet website are damages, estimate incremental costs to VVI.