The Term Incremental Cost Refers to

question 128

Multiple Choice

The term incremental cost refers to

• A)the difference in total costs between alternatives.
• B)a cost that does not entail any dollar outlay but that is relevant to the decision-making process.
• C)the profit forgone by selecting one choice instead of another.
• D)a cost that constitutes expenses to be incurred even though there is no activity.

---

Definitions:

Quality of Income Ratio

A financial metric that assesses the ability of a company to translate its earnings into cash, providing insight into financial health and operational efficiency.

Cash Flow

The net amount of cash and cash-equivalents being transferred into and out of a business, used to assess the company's liquidity, financial flexibility, and overall financial health.

Interest Expense

Costs incurred by an entity for borrowed funds, typically presented as a line item on the income statement.