Business risk is a function of
A) Sales variability.
B) Operating leverage.
C) Financial leverage.
D) Choices a and b.
E) Choices b and c.

Question

Quizplus · Accepted Answer

Business risk is influenced by sales variability and operating leverage, but not directly by financial leverage. Sales variability affects the predictability of income, while operating leverage impacts how fixed costs relate to changes in sales, both of which are key components of business risk.

Business Risk Is a Function of