Tree Corporation Can Influence the Decisions of Root Ltd

question 13

Multiple Choice

Tree Corporation can influence the decisions of Root Ltd., but Root is not a subsidiary of Tree Corporation.What level of influence must Tree Corporation have over Root Ltd.?

• A)Control
• B)Significant influence
• C)Passive investment
• D)Active investment

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Definitions:

Credit Terms

Conditions under which credit is extended by a lender to a borrower, including repayment timelines, interest rates, and penalties for late payments.

Net 30

A trade credit term indicating that payment in full is expected within 30 days after the invoice date or goods are received.

Cost of Goods Sold

The direct costs attributable to the production of the goods sold by a company, including material and labor expenses.

Preferred Stock

Equity shares that give investors a claim on a company's earnings before dividends are paid to common stockholders, often with no voting rights.