In Incremental Analysis

question 64

Multiple Choice

In incremental analysis

• A) costs are not relevant if they change between alternatives.
• B) all costs are relevant if they change between alternatives.
• C) only fixed costs are relevant.
• D) only variable costs are relevant.

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Definitions:

Depreciation Expense

This is the systematic allocation of the cost of a tangible asset over its useful life.

Investing Activities

Financial transactions and decisions related to acquiring or disposing of long-term assets and investments that can affect a company's capital structure.

Cash Inflow

Refers to the money received by a business from its various activities, including sales, investments, and financing.

Inventory

The goods and materials a business holds for the purpose of resale or production.