Question

A firm’s sales decline while it is locked into a number of fixed cost leases for...

A firm’s sales decline while it is locked into a number of fixed cost leases for equipment. What is this an example of?

Purchasing power risk

Business risk

Price risk

Financial risk

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Answer #1

purchasing power risk-inflation,Raises the Cost of Borrowing.Lowers the Cost of Borrowing.

Business risk -Increase in production costs ,Cash flow problems

Price risk-decreasing product price,increasing imput price

Financial risk-budget risk,taxation risk,

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