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25 % $ 2 % $ 5,000 37,500 179,250 30,750 $ 1,000 12,250 59,250 750

25 % $ 2 % $ 5,000 37,500 179,250 30,750 $ 1,000 12,250 59,250 750

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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The last three questions are showing as incorrect. Please help? see attachment. Thank you!

25 % $ 2% $ 5,000 37,500 179,250 30,750 $ 1,000 12,250 59,250 750
Transcribed Image Text:25 % $ 2% $ 5,000 37,500 179,250 30,750 $ 1,000 12,250 59,250 750
Expert Solution
Step 1: Understanding of decision making

Lets understand the basics.

Management needs to make decision when new opportunities are available for the business.

Generally business calculate incremental revenue and compare it with incremental cost for getting conclusion.

If the incremental costs are more than incremental revenue then management choose not to go for opportunities.

However if the incremental cost are less than incremental revenue then management choose to go for opportunities. 

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