Investment Decisions Reasoning to Increase the Organization’s Cyber Security using Simulation Models

The purpose of this study is to propose an approach for evaluating investment projects to increase cyber security through the application of simulation modeling. A well-known method for evaluating investment projects from the field of capital budgeting using the net present value (NPV) indicator has been adapted. The expected benefits of the implementation of the project are estimated according to the reduction of breach costs in case of cyber-attacks. By developing a simulation model, the uncertainty in the implementation of similar projects is reflected. Two hypothetical alternatives for an investment project were compared, and one was proposed based on the simulation results. Conclusions are drawn regarding the applicability of the proposed approach.