(Solved):How is the concept of incremental analysis used in decision making?

 

Question

How is the concept of incremental analysis used in decision making?

 

EXPERT ANSWER

Incremental analysis is a tool for aiding decision-making process whereby relevant revenues and costs of one option is compared to the relevant revenues and costs of another option. Relevant costs may refer to expected costs that differ between options.

The incremental analysis uses a worksheet technique in which case relevant costs of one option are outlined in one column

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