Question

    Which of the following risk factors pose business risk

    to an entity?                       I.        Sales volume and sales price                     II.        Purchase Price of raw material                    III.        Operational expenses
    A Only I Correct Answer Incorrect Answer
    B I and II Correct Answer Incorrect Answer
    C Only II Correct Answer Incorrect Answer
    D I and III Correct Answer Incorrect Answer
    E All of the above Correct Answer Incorrect Answer

    Solution

    Business risk is the exposure a company or organization has to factor(s) that will lower its profits or lead it to fail. Sales volume and price, purchase prices, operational expenses have a direct bearing on the profitability of the company and are factors leading to business risk.

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