A company is proposing to expand its productive capacity by a significant amount.What is the decision rule that should be applied by the directors in deciding whether or not to accept the expansion proposal? Accept the project if:

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The best choice is D as it considers both incremental fixed and variable costs and compares them to incremental revenue. This approach ensures that the project will generate a profit and not just cover its costs. A is not sufficient as it only considers fixed costs. B is not relevant as it compares fixed costs to variable costs, and C is incorrect as it suggests that the project will generate a loss.

A Company Is Proposing to Expand Its Productive Capacity by a Significant