Which of the following statements is correct?

All the answers are correct.

The more variable a firms revenues relative to its costs, the more variable its EBIT will be.

All other things being equal, the more debt a firm uses to finance its assets, the lower its interest cost will be.

A more direct method of calculating the DOL is to use the following equation is DOL = EBIT x (Sales - Variable Costs).

Firms that face high levels of business risk can better afford more financial risk.