Which of the following methods would NOT result in a reduction of business risk? Group of...
Which of the following methods would NOT result in a reduction of business risk?
Group of answer choices
diversify
reduce sales volatility
reduce operating leverage
increase fixed operating costs
Homework Answers
Increase fixed operating costs
Business risk is a possibility to not attain desirable profit to sustain the business. There are various factors which influence the business risk such volatile sales volume, change in sale price, change in customer preference, increased operating cost etc.
Business risk can be reduced by diversification of products, reduce in sales volatility and reduction in operating leverage but an increase in fixed operation costs also increase the business risk.
Hope this will help, please do comment if you need any further explanation. Your feedback would be highly appreciated.
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Which of the following methods would NOT result in a reduction
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