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The measure of business risk is __________.
- Aoperating leverage
- Bfinancial leverage
- Ctotal leverage
- Dworking capital leverage
Correct answer: A
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operating leverage
The measure of business risk is operating leverage. Operating leverage is a cost-accounting formula that measures the degree to which a firm or project can increase operating income by increasing revenue.
The measure of business risk is operating leverage. Operating leverage is a cost-accounting formula that measures the degree to which a firm or project can increase operating income by increasing revenue.