Which One of the Following Will Best Reduce the Risk

question 18

Multiple Choice

Which one of the following will best reduce the risk of a project by lowering the degree of operating leverage?

• A) Hiring additional employees rather than using temporary outside contractors
• B) Subcontracting portions of the project rather than purchasing new equipment to do all the work in-house
• C) Buying equipment rather than leasing it short-term
• D) Lowering the projected selling price per unit
• E) Changing the proposed labor-intensive production method to a more capital intensive method

Identify non-financial factors that influence investment decisions.

Analyze investment proposals using the internal rate of return (IRR) method.

Understand the principle of matching project cash inflows to initial outlay through payback methods.

Apply present value index techniques to evaluate investment opportunities.

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Definitions:

Middle Childhood

is a stage of development that typically ranges from around age 6 to 12, characterized by significant growth in cognitive, emotional, and social abilities.

Adolescence

The transitional stage of physical and psychological development that occurs between childhood and adulthood, starting with puberty.

Family Rules

Guidelines or expectations established by families to regulate behaviors and maintain harmony, reflecting values and beliefs unique to the family.

Authoritative

A parenting style characterized by high expectations of maturity, clear communication, and emotional warmth, which is associated with positive child outcomes.