Business Risk Is Affected by a Firm's Operations

question 18

Multiple Choice

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

• A) Demand variability.
• B) Sales price variability.
• C) The extent to which operating costs are fixed.
• D) The extent to which interest rates on the firm's debt fluctuate.
• E) Input price variability.

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Definitions:

BCG Business Portfolio

A matrix developed by the Boston Consulting Group that helps companies analyze their business units or product lines based on market growth rate and market share.

SBUs

Strategic Business Units, which are divisions or units within a company that focus on specific market segments or product lines, operating with their own planning and profit goals.

Growth-Share Matrix

A strategic business tool used to visually assess a company's product portfolio across growth potential and market share dimensions.

Low Market Growth Rates

Situations in which the increase in sales or size of a particular market is slower than average.