Which of the following is least likely to increase the overall risk of a company?
A)Increased sales variability
B)Increased debt levels
C)Increased variable costs while decreasing fixed costs
D)Increased interest rates

Question

Quizplus · Accepted Answer

Increasing variable costs while decreasing fixed costs can actually reduce a company's overall risk. This is because fixed costs must be paid regardless of the company's sales volume, making the company more vulnerable to downturns. Variable costs, on the other hand, fluctuate with sales, so if sales decrease, the company's costs decrease as well, which can help stabilize the company's financial situation.

Which of the Following Is Least Likely to Increase the Overall