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If, for a given level of activity, a firms ratio of variable costs to fixed costs were to rise and, at the same time, its

If, for a given level of activity, a firms ratio of variable costs to fixed costs were to rise and, at the same time, its ratio of debt to equity were to fall, what would be the impact on the firms financial and operating risk?

Financial risk Operating risk

A.

Decrease Decrease
B.

Increase Decrease
C.

Decrease Increase
D.

Increase Increase

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