. If two companies have identical unit sales volume and operating risk, they are most likely to also have identical:
- sales risk.
- business risk.
- sensitivity of operating earnings to changes in the number of units produced and sold.
Can someone briefly explain this question
C answer
As an elasticity, the degree of operating leverage measures the sensitivity of operating earnings to a change in the number of units produced and sold.
I think the answer would be B. because business risk ke do source hote hai h sales risk and operating risk. both companies have identical sales risks and operating risks, therefore, both have also identical business risks.
answer by the institute is Option C
Even I did not get the answer
Why Option C and not Option B?