Business Risk Is Affected by a Firm's Operations

question 34

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)input price variability
• C)the extent to which operating costs are fixed
• D)the extent to which interest rates on the firm's debt fluctuate

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Definitions:

3/20, Net 30

A payment term indicating that a 3% discount is available if payment is made within 20 days; otherwise, the full amount is due within 30 days.

Minimizing Cash Holdings

A financial strategy focused on reducing the amount of cash a company or individual keeps on hand, often to boost efficiency or investment returns.

Relaxed Working Capital Policies

Financial strategies that involve maintaining higher levels of current assets than necessary or reducing short-term liabilities, aiming for greater flexibility and lower risk of liquidity problems.

Short-term Loans

Borrowed funds that require repayment within a shorter timeframe, typically less than one year.