What is the differential revenue from the acceptance of the offer?
A) $300,000
B) $262,500
C) $52,500
D) $250,000

Question

Quizplus · Accepted Answer

Differential revenue = (Revenue from accepting offer) - (Revenue from rejecting offer)
Revenue from accepting offer = (Total revenue without offer) + (Additional revenue from accepting offer) = $2,000,000 + $525,000 = $2,525,000
Revenue from rejecting offer = Total revenue without offer = $2,000,000
Differential revenue = $2,525,000 - $2,000,000 = $525,000

Therefore, the differential revenue from accepting the offer is $525,000. The best choice is B, as it represents the correct differential revenue.

What Is the Differential Revenue from the Acceptance of the Offer