If a project has a higher proportion of fixed to variable, Financial Management

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If a project has a higher proportion of fixed to variable

If a project has a higher proportion of fixed to variable costs, holding the risk of its revenues constant

a) its financial leverage will be higher.

b) its beta will be unaffected, since beta does not measure the sensitivity of the project's cash flows to market risk.

c) its beta will be higher, hence its cost of capital will be higher.

d) its beta will be lower, hence its cost of capital will be lower.

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Financial Management: If a project has a higher proportion of fixed to variable

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Financial Management: If a project has a higher proportion of fixed to variable

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