Which one of the following characterstics best describes a project that has a low degree of operating leverage? a) high level of forecasting risk.
b) relatively high initial cash outlay.
c) high variable costs relative to the fixed costs.
d) a high depreciation expense.
e) an OCF that is highly sensitive to the sales quantity.

Which of the following actions would be most likely to reduce potential conflicts of interest between stockholders and managers? a. change the corporation's formal documents to make it easier for outside investors to acquire a controlling interest in the firm through a hostile takeover. b. eliminate a requirement that members of the board of directors must hold a high percentage of their personal wealth in the firm's stock. c. for a firm that compensates managers with stock options, reduce the time before options are vested, i.e., the time before options can be exercised and the shares that are received can be sold. d. pay managers large cash salaries and give them no stock options. e. beef up the restrictive covenants in the firm's debt agreements.