If a Project Has a Higher Proportion of Fixed to Variable

question 13

Multiple Choice

If a project has a higher proportion of fixed to variable costs,holding the risk of its revenues constant:

• A)its beta will be lower,hence its cost of capital will be lower.
• B)its beta will be higher,hence its cost of capital will be higher.
• C)its beta will be unaffected,since beta does not measure the sensitivity of the project's cash flows to market risk.
• D)its financial leverage will be higher.

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Definitions:

Participatory Initiatives

Programs or projects designed to actively involve stakeholders, especially the community or employees, in decision-making or activities.

Leadership Behavior

The actions and conduct exhibited by leaders, including how they motivate, influence, and guide their followers towards achieving organizational goals.

Terms

Conditions and stipulations that are specified or agreed upon in a contract or agreement.

Relations-Oriented Behavior

A leadership approach that emphasizes maintaining positive relationships within a team, being supportive, and considering the needs of team members.