Claudia is learning about differential analysis in Chapter 25 this week. She made a goal to try and go one chapter without getting mad. However, there is something that is driving her crazy: She can’t figure out what the purpose of the “differential” column is. She points out the “Lease or Sell” example in the book with total income calculated for each alternative. “Clearly, leasing would provide a higher income than selling, so why do we need that stupid third column?” Claudia asks aloud. “I bet it’s just those dumb old accountants that have nothing better to do than waste our time with extra work.” Please summarize what differential analysis is and explain to Claudia why you think that “third column” might be important. Alternatively, if you totally agree with Claudia on this issue, please support your position.
Claudia is learning about differential analysis in Chapter 25 this week. She made a goal to try and go one chapter without getting mad.
However, there is something that is driving her crazy: She can’t figure out what the purpose of the “differential” column is. She points out the “Lease or Sell” example in the book with total income calculated for each alternative. “Clearly, leasing would provide a higher income than selling, so why do we need that stupid third column?” Claudia asks aloud. “I bet it’s just those dumb old accountants that have nothing better to do than waste our time with extra work.”
Please summarize what differential analysis is and explain to Claudia why you think that “third column” might be important. Alternatively, if you totally agree with Claudia on this issue, please support your position.
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