The tradeoff between profitability and risk is one of the aspects of the following A. Capital budgeting…
Capital budgeting, working capital management and financing decisions all involve balancing expected profitability against risk. Operating leverage measures the sensitivity…
Choose your answer
The tradeoff between profitability and risk is one of the aspects of the following
A. Capital budgeting decision
B. Working capital management decision
C. Financing decision
D. Operating leverage
Answer and explanation
Correct answer A
Capital budgeting, working capital management and financing decisions all involve balancing expected profitability against risk. Operating leverage measures the sensitivity of operating profit to changes in sales arising from fixed operating costs.
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Telangana SET (TG SET)