Which of the following statements regarding incremental analysis is true? Assume that there are no opportunity costs and that the capacity exists to complete any of the alternatives.
A)The preferred alternative will have revenues that are greater than the revenues of the other alternatives.
B)The preferred alternative will have expenses that are greater than the expenses of the other alternatives.
C)The preferred alternative will have fixed expenses that are less than the fixed expenses of the other alternatives.
D)The preferred alternative will have profits that are greater than the profits of the other alternatives.

Question

Quizplus · Accepted Answer

Incremental analysis involves comparing the costs and revenues of different alternatives to determine which option is the most profitable. Therefore, the preferred alternative will have profits that are greater than the profits of the other alternatives. The other options given are irrelevant to the decision making in incremental analysis.

Which of the Following Statements Regarding Incremental Analysis Is True