In Incremental Analysis

question 137

Multiple Choice

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.

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Definitions:

Financial Instruments

Contracts that give rise to both a financial asset of one entity and a financial liability or equity instrument of another entity.

Convertible Note

A financial instrument that can be converted into a specified number of shares of the issuing company at certain times during its life, usually at the discretion of the holder.

Derivative Instruments

Financial contracts whose value is derived from the value of an underlying asset, index, or interest rate.

Primary Instruments

The basic securities in the financial market, such as stocks and bonds, that are traded directly between entities.