Variations in operating income over time because of variations in unit sales, price, cost margins, and/or fixed expenses are called:
A) business risk
B) exchange rate risk
C) purchasing power risk
D) financial risk

Question

Quizplus · Accepted Answer

Business risk refers to the potential variability in operating income due to changes in sales volume, prices, cost margins, and fixed expenses. It is inherent to the operations of a business and does not involve financial leverage.

Variations in Operating Income Over Time Because of Variations in Unit