You are considering a project that you believe is quite risky. To reduce any potentially harmful results from accepting this project, you could:

A) Lower the degree of operating leverage.
B) Lower the contribution margin.
C) Increase the initial cash outlay.
D) Increase the fixed costs per unit while lowering the contribution margin.
E) Lower the operating cash flow of the project.

Degree of Operating Leverage

A financial ratio that measures the sensitivity of a company's operating income to its sales volume, indicating how earnings are affected by revenue changes.

Contribution Margin

The amount by which the sale of a product exceeds its variable costs, indicating how much contributes to covering fixed costs and generating profit.

Initial Cash Outlay

The initial sum of money required to start an investment or project, often including costs such as purchase price, setup fees, and licensing.