Question: Why might variable costs be considered less risky than fixed costs? (Fixed costs dont change in relation to sales, so they still have to be
Why might variable costs be considered less risky than fixed costs? (Fixed costs dont change in relation to sales, so they still have to be paid, even if there is no income.) What happens if you dont sell any cookies one month or sell only a hundred? The riskiness of fixed costs demonstrates why its a good idea for entrepreneurs to have a cash reserve in the bank equal to three months of fixed costs.
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