Consider the following statements about the total-cost and the incremental-cost approaches of investment evaluation:
I. Both approaches will yield the same conclusions.
II. Choosing between these approaches is a matter of personal preference.
III. The incremental approach focuses on cost differences between alternatives.
Which of the above statements is (are) true?

Question

Quizplus · Accepted Answer

Both approaches will yield the same conclusions as they are different methods to evaluate the same investment decision. Choosing between them is often a matter of personal preference, and the incremental approach indeed focuses on cost differences between alternatives.

Consider the Following Statements About the Total-Cost and the Incremental-Cost