How might the following influences affect a firms business risk? Consider each separately.

1. Imports increase the level of competition.
2. Labor costs decline.
3. Healthcare costs (provided for all employees) increase.
4. The firms proportion of social security and unemployment insurance taxes rises.
5. Adoption of new technology allows the firm to produce the same output with the fewer employees.

6. How might the following influences affect a firms financial risk? Consider each separately.

7. Interest rates on the firms short-term bank loans are reduced
8. The firm refinances a mortgage on one of its buildings at a lower interest rate
9. Tax rates decline
10. The firms stock price rises
11. The firm suffers a sales and operating income decline