An investor should always use the equity method to account for an investment if:

An investor should always use the equity method to account for an investment if:

1. A) It has the ability to exercise significant influence over the operating policies of the investee.
2. B) It owns 30% of an investee’s stock.
3. C) It has a controlling interest (more than 50%) of an investee’s stock.
4. D) The investment was made primarily to earn a return on excess cash.
5. E) It does not have the ability to exercise significant influence over the operating policies of the investee.