Identify a seven-stage process for measuring risks.

After a company identifies the potential risks, it must measure those risks. Epstein and Buhovac (2014, p. 185) identified a seven-stage process for measuring those risks.

1. Calculate the benefit associated with each issue that may generate risk.
2. Calculate the potential costs for each and include reputation risks.
3. Estimate the probability that the risks will happen.
4. Multiply the potential cost by its probability to determine the expected value of each risk.
5. Estimate when the risk may happen and calculate NPV.
6. Add the NPVs of all risks and add as a line item in ROI.
7. Calculate expected value of ROI.

Consider a Saudi business and what the risks are. How might the company estimate the probability the risk will happen?

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