The correct answer is D.
OBJ-4.1: The annual loss expectancy (ALE) of the data center would be $93,750. The annual loss expectancy (ALE) is the average amount that would be lost over a year for a given asset. The annual loss expectancy is calculated by multiplying the single loss expectancy and the annual rate of occurrence together. The single loss expectancy is the amount of value lost in a single occurrence of a risk factor being realized. The single loss expectancy is calculated by multiplying the asset value and the exposure factor together. The annual rate of occurrence is the number of times a risk might be realized in a given year. Therefore, the annual loss expectancy equals the ARO (1 occurrence divided by 20 years) multiplied by the SLE (exposure factor of 60% time the asset value of $3,125,000 equals ), which equals $92,750 (0.05 x $1,875,000).