A firm's business risk is affected by:
A)business cycle
B)the firm's operating leverage
C)competitive pressures
D)all the above

Question

Quizplus · Accepted Answer

Business risk is affected by all of the above factors. The business cycle affects the firm's sales and revenue. The firm's operating leverage affects its ability to cover its fixed costs as sales fluctuate. Competitive pressures affect the firm's ability to maintain market share and pricing power. All of these factors contribute to the firm's overall level of risk.

A Firm's Business Risk Is Affected By