Question

If the adoption of a new product will reduce the sales of an existing product, then the projected sales should:_______.

a) reflect only the sales of the new product
b) include only the reduction amount.
c) equal the incremental increase in total sales.
d) be adjusted upward by the reduction amount.

Answer 1

C. equal the incremental increase in total sales.

Step-by-step explanation:

This analysis is mostly used in a lot of cases by companies in checking the profitability of all their dealings which is been done in segments here. In the case above equalling total sale increment comes on if reduction will be seen in the old stock value when the new product comes on board. This is seen to be done by companies mostly when it puts its attached statement from their income to the earned total.

Also, summations of this kind is also seen to manipulate the revenue change percentage which is dependent on when these events were been documented.