Which of the Following Companies Would Have the Greatest Business

question 8

Multiple Choice

Which of the following companies would have the greatest business risk?

• A) Manitoba Telephone System
• B) Royal Bank of Canada
• C) Canada Safeway
• D) Air Canada

---

Definitions:

Contribution Margin

The amount by which sales revenue exceeds variable costs, indicating how much contributes to covering fixed costs and generating profit.

Capital Intensive

Describes industries or businesses that require large amounts of investment in heavy machinery, equipment, or other capital assets to produce goods or services.

Margin of Safety

The difference between actual or projected sales and the break-even point, indicating the level of risk in meeting profitability targets.

Margin of Safety

The difference between actual or projected sales and the break-even point, indicating the amount of sales decline a business can tolerate.