An Investor Should Always Use the Equity Method to Account

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

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