The best way to mitigate the risk to operations caused by severe weather events is to develop a business continuity plan (BCP). A BCP is a document that describes the procedures and resources needed to ensure the continuity of the organization's critical functions and processes in the event of a disruption or disaster. A BCP helps to identify the recovery objectives, strategies, and priorities, as well as the roles and responsibilities of the recovery team members. A BCP also helps to prepare and test the recovery capabilities and resources, such as alternate locations, backup systems, and communication channels. The other options are not as effective as developing a BCP, although they may be part of the BCP process or outcomes. Preparing a cost-benefit analysis to evaluate relocation, preparing a disaster recovery plan (DRP), and conducting a business impact analysis (BIA) for an alternate location are all activities that can help to develop or implement a BCP, but they are not the best way to mitigate the risk to operations. References = Risk and Information Systems Control Study Manual, Chapter 5, Section 5.2.1, page 5-9.

Organizational objectives should be the primary input to determine risk tolerance, as they define the desired outcomes and performance of the organization, and guide the selection of the acceptable level of risk that the organization is willing to take to achieve those objectives. Regulatory requirements, annual loss expectancy (ALE), and risk management costs are not the primary inputs, as they are more related to the external or internal constraints or factors that affect the risk tolerance, rather than the drivers or determinants of the risk tolerance. References = CRISC Review Manual, 7th Edition, page 109.

Explanation/Reference:
Explanation:
The ALE of this project will be $ 108,000.
Single Loss Expectancy is a term related to Quantitative Risk Assessment. It can be defined as the monetary value expected from the occurrence of a risk on an asset. It is mathematically expressed as follows:
SLE = Asset value * Exposure factor
Therefore,
SLE = 200,000 * 0.45
= $ 90,000
As the loss is occurring once every month, therefore ARO is 12. Now ALE can be calculated as follows:
ALE = SLE * ARO
= 90,000 * 12
= $ 108,000