Identifying why companies invest and classifying investmentsGarden Haven has excess cash of $15,000 at the end of the harvesting season. Garden Haven will need this cash in four months for normal operations.RequirementsWhat are some reasons why Garden Haven may choose to invest in debt or equity securities?What type of classification would Garden Haven’s investment fall within— short-term or long-term? Why?

Investments: Companies invest in stocks and bonds of other companies or governmental entity to…

Answered: Identifying why companies invest and…

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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Identifying why companies invest and classifying investments

Garden Haven has excess cash of $15,000 at the end of the harvesting season. Garden Haven will need this cash in four months for normal operations.

Requirements

What are some reasons why Garden Haven may choose to invest in debt or equity securities?
What type of classification would Garden Haven’s investment fall within— short-term or long-term? Why?

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