Business risk is affected by a firm's operations.Which of the following is NOT directly associated with (or does not directly contribute to)business risk?
A) Demand variability.
B) Sales price variability.
C) The extent to which operating costs are fixed.
D) The extent to which interest rates on the firm's debt fluctuate.
E) Input price variability.

Question

Quizplus · Accepted Answer

Interest rate fluctuation is not directly associated with a firm's operations and therefore does not contribute to business risk. The other options (A through E) all directly affect a firm's operations and contribute to business risk.

Business Risk Is Affected by a Firm's Operations