Which of the Following Statements About Incremental Analysis Is False

question 32

Multiple Choice

Which of the following statements about incremental analysis is false?

• A)It is based on historical information relevant to the decision at hand.
• B)It focuses on the differences between alternatives.
• C)It reduces the time taken to select the best course of action.
• D)It makes the evaluation process easier for the decision maker.

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Definitions:

Issue Price

The price at which new shares are offered to the public or bonds are sold, determined at the time of issue.

Stock Dividends Distributable

It represents the shares that are due to shareholders as a dividend but have not yet been distributed.

Retained Earnings

The accumulated portion of net income that a company decides to keep, rather than distributing among shareholders as dividends, to finance investment or pay off debt.

Common Shares

Equity securities representing ownership interests in a corporation, providing voting rights and entitling shareholders to a share of the company's profits via dividends.