nerdexam
CompTIA

CAS-002 · Question #95

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…

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.

Integration of Computing, Communications and Business Disciplines

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

How the community answered

(18 responses)
  • A
    6% (1)
  • C
    11% (2)
  • D
    83% (15)

Why each option

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.

ANearly four years

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.

BNearly six years

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.

CWithin the first year

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.

DNearly three yearsCorrect

The total annual software project cost is 8 projects x $50,000 = $400,000. A 30% savings equals $120,000 per year. Dividing the $300,000 investment by $120,000 annual savings yields 2.5 years, which is best described as 'nearly three years.' This calculation demonstrates the standard ROI break-even formula applied to a security investment.

Concept tested: Security ROI and cost-benefit break-even calculation

Source: https://csrc.nist.gov/publications/detail/sp/800-65/final

Topics

#ROI#cost-benefit analysis#security investment#financial analysis

Community Discussion

No community discussion yet for this question.

Sign up to join the discussion
Full CAS-002 Practice