I am studying for an exam and came across a question asking to find what the single loss expectance would be, but I am failing to understand exposure factor in the calculation.
SLE = Asset Value * exposure factor
The question: Your company owns a machine that is worth $100,000, if it was damaged in a fire it would only be worth $8,000 in parts. What would the single loss expectance be?
My thought is that since the machine is $100,000 and you can only salvage $8,000 then the answer should be $92,000. You are expected to lose $92,000 when a fire occurs.
The answer they give is that SLE = $8,000. This doesn't make sense because you aren't losing $8,000, you are losing $92,000.
Can someone please explain why SLE is $8,000 and not $92,000?