If budgeted net income is projected to be less than the company's goal, the company should try to

Question

Quizplus · Accepted Answer

In order to increase net income, a company needs to either increase revenues or decrease expenses, or both. Incurring more fixed costs and less variable costs may not necessarily lead to an increase in net income. Increasing the collection of cash receipts may improve cash flow but does not directly impact net income. Financing operations with a loan may provide temporary relief, but it increases debt and interest expenses, which may further reduce net income. Therefore, the best choice is to increase revenues and decrease expenses.

If Budgeted Net Income Is Projected to Be Less Than