Question

Incremental analysis requires judgment about financial and nonfinancial concerns. nonfinancial concerns may include:

a. increased break-even points.
b. legal issues.
c. ethical considerations.
d. environmental impacts.
e. reputation effects.

Answer 1

Incremental analysis involves considering both financial and nonfinancial factors in decision-making. Nonfinancial concerns, which are crucial to the overall evaluation, include legal issues, ethical considerations, environmental impacts, and reputation effects.

option d is the correct

Step-by-step explanation:

Incremental analysis is a decision-making process that involves evaluating the additional or marginal costs and benefits associated with a decision.

This type of analysis helps in making choices by comparing what is sacrificed with what is gained. When applying incremental analysis, a decision-maker must consider both financial and nonfinancial factors. Financial concerns typically involve direct costs and benefits that can be easily quantified. However, nonfinancial concerns play a significant role as well, which may include;

While it is challenging to assign a monetary value to nonfinancial concerns, they are crucial to the overall evaluation of decisions, especially in large-scale projects like pipeline construction where environmental concerns must be weighed against economic and social benefits.