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CAS-002 · Question #95
CAS-002 Question #95: Real Exam Question with Answer & Explanation
The correct answer is D: Nearly three years. The ROI break-even point is approximately 2.5 years, which rounds to nearly three years based on the annual savings generated by the security initiative.
Question
To support a software security initiative business case, a project manager needs to provide a cost benefit analysis. The project manager has asked the security consultant to perform a return on investment study. It has been estimated that by spending $300,000 on the software security initiative, a 30% savings in cost will be realized for each project. Based on an average of 8 software projects at a current cost of $50,000 each, how many years will it take to see a positive ROI?
Options
- ANearly four years
- BNearly six years
- CWithin the first year
- DNearly three years
Explanation
The ROI break-even point is approximately 2.5 years, which rounds to nearly three years based on the annual savings generated by the security initiative.
Common mistakes.
- A. Nearly four years would require the annual savings to be approximately $75,000, which does not match the 30% savings on $400,000 total project cost.
- B. Nearly six years would imply annual savings of only $50,000, far less than the $120,000 yielded by 30% of the $400,000 total project spend.
- C. A positive ROI within the first year would require annual savings to exceed $300,000, which would mean the 30% savings would need to apply to a total project budget exceeding $1,000,000.
Concept tested. Security ROI and cost-benefit break-even calculation
Reference. https://csrc.nist.gov/publications/detail/sp/800-65/final
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