Market risk of project is its degree of operating leverage

Assignment Help Financial Management

Reference no: EM13881925

One factor that can affect the market risk of a project is its degree of operating leverage, which is

A. the relative proportion of operating assets versus equity.

B. the relative proportion of operating expenses versus non-operating expenses.

C. the relative proportion of operating assets versus non-operating assets.

D. the relative proportion of fixed versus variable costs.

Reference no: EM13881925

Questions Cloud

Cost of capital estimate deviate to change the decision : FastTrack Bikes, Inc. is thinking of developing a new composite road bike. Development will take six years and the costs is $296,638 per year. Once in production, the bike is expected to make $202,100 per year for 10 years. The cash inflows begin at ..

Various trading strategies appear to offer non-zero alphas : Various trading strategies appear to offer non-zero alphas when we examine real world data. If indeed these alphas are positive, it could be explained by any of the following except:

Considered difficulty with regards to the CAPM : Which of the following is not considered a difficulty with regards to the CAPM?

Spend all of its excess cash on share repurchase program : A firm has a market value equal to its book value. Currently, the firm has excess cash of $1,400 and other assets of $3,500. Equity is worth $4,900. The firm has 700 shares of stock outstanding and net income of $1,450. The firm has decided to spend ..

Market risk of project is its degree of operating leverage : One factor that can affect the market risk of a project is its degree of operating leverage, which is

A firm has market value equal to its book value : A firm has a market value equal to its book value. Currently, the firm has excess cash of $700 and other assets of $7,000. Equity is worth $7,700. The firm has 550 shares of stock outstanding and net income of $900. What will the new earnings per sha..

What is the value of the embedded call option : Assume that the 3-year 4.5% bond is callable in Year 1 at (101) and in Year 2 at par. The call rule is to call whenever the price exceeds the call price. Calculate the value of the bond with the embedded option. What is the value of the embedded call..

Purchased foreclosed house-mortgage loan with interest rate : Lucinda Lacy purchased a foreclosed house today for $105,500 by making a down payment of 15% of the purchase price and paying closing costs of: Determine manually (handwritten), by trial and error, Lucinda’s rate of return, if she owns the house for ..

Impact of sub cultural elements such income-social class : What is the impact of sub cultural elements such as income, social class, religion, ethnicity, gender, and age on consumer buying? How do these affect consumer shopping behavior? What sub cultural elements best influence online versus mall shopping p..

User Account

All Pages