Question

In incremental analysis, a. only costs are analyzed. b. only revenues are analyzed. c. both costs and revenues may be analyzed. d. both costs and revenues that stay the same between alternate courses of action will be analyzed

Answer 1

Answer:

The correct answer is letter "C": both costs and revenues may be analyzed.

Explanation:

Incremental analysis studies two options from where only one is to be selected. It is a helpful tool that allows allocating limited resources efficiently. It is mostly implemented to find out which alternative provides the greater yield producing at the lowest cost. Incremental analysis does not consider sunk or past costs.

Therefore, incremental analysis may study both costs and revenues between two options.