Which of the Following Best Describes Why the Predicted Incremental

question 62

Multiple Choice

Which of the following best describes why the predicted incremental earnings arising from a given decision are not sufficient in and of themselves to determine whether that decision is worthwhile?

• A) They do not tell how the decision affects the firm's reported profits from an accounting perspective.
• B) They are not easily predicted from historical financial statements of a firm and its competitors.
• C) These earnings are not actual cash flows.
• D) They do not show how the firm's earnings are expected to change as the result of a particular decision.