Companies that carry a high level of fixed costs relative to variable costs are considered to have

Question

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Companies with high fixed costs have a greater risk because they have a larger cost base that they must cover regardless of sales levels. If sales are lower than expected, their revenue may not be enough to cover these fixed costs, leading to a loss. Companies with high variable costs, on the other hand, can reduce costs if sales are low, reducing their risk.

Companies That Carry a High Level of Fixed Costs Relative