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Question 14 10 pts Part 3 Next you attend an investment committee where your boss, the Chief Executive Office (CEO), and other executives meet to
Question 14 10 pts Part 3 Next you attend an investment committee where your boss, the Chief Executive Office (CEO), and other executives meet to discuss capital budgeting. The committee begins discussing the cost structure of a project. Three comments are made by various executives. Comment 1: If the project has high variable costs in relation to fixed costs, its accounting profits will be more sensitive to any change in revenues. Comment 2: If the project has high fixed costs, it will have a higher Degree of Operating Leverage (DOL) and its profits will be more sensitive to revenue changes. Comment 3: The project with a DOL of 1.73 is more risky than a project with a DOL of 5.23. Which comment is correct? Comment 1 O Comment 2 Comment 3 O All of the comments are correct
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