Which of the Following Is Not a Reason to Invest

question 81

Multiple Choice

Which of the following is not a reason to invest excess cash in temporary investments?

• A) earn interest revenue
• B) influence the operations of another company
• C) receive dividends
• D) realize gains from the increase in market value of the securities

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Definitions:

Double-declining-balance Method

A method of depreciation that accelerates the depreciation of an asset by applying a fixed rate to its declining book value.

Straight-line Method

A depreciation method that allocates the cost of an asset evenly over its useful life, resulting in a constant annual depreciation expense.

Depreciation Expense

The allocation of the cost of a tangible asset over its useful life, reflecting the decrease in the asset's value over time.

Salvage Value

Salvage value is the estimated resale value of an asset at the end of its useful life.