Select the Correct Statement from the Following

question 50

Multiple Choice

Select the correct statement from the following.

• A) A fixed cost structure offers less risk (i.e., less earnings volatility) and higher opportunity for profitability than does a variable cost structure.
• B) A variable cost structure offers less risk and higher opportunity for profitability than does a fixed cost structure.
• C) A fixed cost structure offers greater risk but higher opportunity for profitability than does a variable cost structure.
• D) A variable cost structure offers greater risk but higher opportunity for profitability than does a fixed cost structure.

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Definitions:

Coefficient of Correlation

A mathematical indicator that evaluates the intensity of the connection between two factors.

Sum of Squares

A measure used in statistical analyses to quantify the variation or deviation of data points from their mean; the total of each data point's squared difference from the mean.

Regression SSR

Regression SSR (Sum of Squares for Regression) quantifies the variation explained by the linear model in regression analysis.

Random Error

Variability in data that is caused by unpredictable and unavoidable fluctuations in the measurement process.