What is a potential consequence of ceasing a profitable but risky business activity?

The choice that indicates a potential consequence of ceasing a profitable but risky business activity is grounded in the relationship between risk and reward in business operations. By stopping a lucrative venture, a company may significantly reduce its income streams. Profitable activities, regardless of their risk level, contribute to the overall financial performance of the organization. When such activities are shut down, the immediate impact is typically a decline in earnings, as the organization no longer benefits from the revenue generated by those activities.

In addition, ceasing these activities could affect cash flow, operational synergies, and potential market presence, which are often crucial to sustaining long-term profitability. Therefore, the connection between stopping a profitable yet risky activity and its detrimental effect on earnings is clear, as it directly impacts the organization's financial health and overall business viability.