The pro forma statement of comprehensive income for a cost reduction project:

A) Will reflect a reduction in the sales of the firm.
B) Will generally reflect no incremental sales.
C) Has to be prepared reflecting the total sales and expenses of a firm.
D) Cannot be prepared due to the lack of any project related sales.
E) Will always reflect a negative project operating cash flow.

Question

Andres Lopez · Accepted Answer

Final Answer : B, Explanation :  A pro forma statement of comprehensive income for a cost reduction project typically reflects the financial outcomes of implementing the project, focusing on the changes in expenses rather than sales. Since the project is about reducing costs, it generally does not directly increase sales, hence option B is correct.

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