Chapter 13, Problem 3DQ

To determine

Investment:

The act of allocating money to buy a monetary asset, in order to generate wealth in the future is referred to as investment.

Equity investment:

Equity investments are stock instruments which claim ownership in the investee company and pay dividend revenue to the investor company.

Equity method:

Equity method is the method used for accounting equity investments which claim a significant influence of above 20% but less than 50% in the outstanding stock of the investee company.

To explain: The requirements for using equity method for equity investments