Business risk is affected by a firm's operations. Which of the following
Is NOT associated with (or does not contribute to) business risk?

Question

Quizplus · Accepted Answer

The extent to which interest rates on the firm's debt fluctuate is not associated with or does not contribute to business risk, as it is a financial risk. Business risk is related to the variability of a firm's earnings due to its operations, such as the demand variability, sales price variability, and input price variability. The extent to which operating costs are fixed also contributes to business risk, as high fixed costs can lead to lower profits and higher risk if sales decrease.

Business Risk Is Affected by a Firm's Operations