FINANCIAL ACCOUNTING:TOOLS FOR BUSINESS
19th Edition
ISBN: 9781119493624
Author: Kimmel
Publisher: WILEY
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Question
Chapter AH, Problem 1Q
To determine
Investment: It refers to the process of using the currently held excess cash to earn profitable returns in future. The investments can be made in debt securities such as bonds or equity securities such as shares.
To explain: the reasons for companies investing in securities.
Expert Solution & Answer
Explanation of Solution
The reasons for investing in securities are explained below:
- To earn
returns by investing the excess cash generated by the company. - To generate income from investments in securities
- To dominate the competitors or suppliers by gaining controlling interests over them through investments.
- To enter into a new industry through investments in other companies’ securities.
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Chapter AH Solutions
FINANCIAL ACCOUNTING:TOOLS FOR BUSINESS
Ch. AH - Prob. 1QCh. AH - Prob. 2QCh. AH - Prob. 3QCh. AH - Prob. 4QCh. AH - What is the cost of an investment in stock?Ch. AH - Prob. 6QCh. AH - Prob. 7QCh. AH - Prob. 8QCh. AH - Prob. 9QCh. AH - Distinguish between the cost and equity methods of...
Ch. AH - What are consolidated financial statements?Ch. AH - What are the valuation guidelines for trading and...Ch. AH - Prob. 13QCh. AH - Prob. 14QCh. AH - Prob. 15QCh. AH - Prob. 16QCh. AH - Prob. 17QCh. AH - Prob. H.2BECh. AH - Prob. H.3BECh. AH - Prob. H.4BECh. AH - Prob. H.5BECh. AH - Prob. H.6BECh. AH - Prob. H.7BECh. AH - Prob. H.8BECh. AH - Prob. H.1ECh. AH - Prob. H.2ECh. AH - Prob. H.3ECh. AH - Prob. H.4E
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