Which of the following statements is true? a. The lower the margin of safety, the lower the risk of a loss if actual sales do not meet expectations.
B) A good rule of thumb is that the margin of safety should be approximately 20%.
C) The higher the margin of safety, the lower the risk of a loss if actual sales do not meet expectations.
D) Firms that face highly variable demand conditions desire a lower margin of safety.
E) None of the above statements are true.

Question

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The Answer of Which of the following statements is true? a. The lower the margin of safety, the lower the risk of a loss if actual sales do not meet expectations.
B) A good rule of thumb is that the margin of safety should be approximately 20%.
C) The higher the margin of safety, the lower the risk of a loss if actual sales do not meet expectations.
D) Firms that face highly variable demand conditions desire a lower margin of safety.
E) None of the above statements are true.

Which of the Following Statements Is True? A