You are considering a project that you believe is quite risky.To reduce any potentially harmful results from accepting this project,you could:
A)lower the degree of operating leverage.
B)lower the contribution margin per unit.
C)increase the initial cash outlay.
D)increase the fixed costs per unit while lowering the contribution margin per unit.
E)lower the operating cash flow of the project.

Question

Quizplus · Accepted Answer

By lowering the degree of operating leverage, the company can decrease the reliance on fixed costs and therefore reduce the potential for significant losses if the project does not perform as expected. This can be achieved by increasing variable costs (such as labor or materials) and decreasing fixed costs (such as rent or machinery).

You Are Considering a Project That You Believe Is Quite