Evidence That a Firm Has High Business Risk Would Be

question 21

Multiple Choice

Evidence that a firm has high business risk would be provided by its volatile ____.

• A) Fixed costs.
• B) Profit after taxes.
• C) Operating profit.
• D) Sales.
• E) Employee turnover.

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Definitions:

Declining Segment

A portion of a market that is experiencing a decrease in consumer demand or sales.

Inputs

Resources used in the production process to produce goods or services, including labor, raw materials, and capital.

Output

The total amount of goods or services produced by a company, industry, or economy over a given period.

Diseconomies of Scale

The phenomenon where production costs per unit increase as the scale of operation enlarges, often due to inefficiencies or increased complexity.