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Questions and Answers
What is business risk primarily associated with?
What is business risk primarily associated with?
- The amount of variable costs a company incurs
- The level of fixed costs a company has
- The variability in a company's income over time (correct)
- The degree of financial leverage a company employs
Which type of companies typically experience relatively stable income patterns?
Which type of companies typically experience relatively stable income patterns?
- Manufacturing companies
- Utility companies (correct)
- Technology companies
- Retail companies
What is financial risk tied to?
What is financial risk tied to?
- A company's fixed costs (correct)
- A company's revenue
- A company's variable costs
- A company's market share
What is the contribution margin ratio?
What is the contribution margin ratio?
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What does the Degree of Operating Leverage (DOL) measure?
What does the Degree of Operating Leverage (DOL) measure?
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What is the purpose of the Degree of Operating Leverage (DOL)?
What is the purpose of the Degree of Operating Leverage (DOL)?
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What is the formula for calculating the contribution margin?
What is the formula for calculating the contribution margin?
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Which type of costs allow a company to adjust its operating costs?
Which type of costs allow a company to adjust its operating costs?
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What increases a company's operating risk?
What increases a company's operating risk?
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What is the formula for calculating the Degree of Operating Leverage (DOL) not provided in the text?
What is the formula for calculating the Degree of Operating Leverage (DOL) not provided in the text?
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