A necessary condition to use the equity method of reporting for an equity investment is that the investor company must Group of answer choices have the ability to exercise significant influence over the operating and financial policies of the investee. own at least 30% of the investee's voting stock. possess a controlling interest in the investee's voting stock. not have the ability to exercise significant influence over the operating and financial policies of the investee.

Asmall town wants to build some new recreational facilities. the proposed facilities include a swimming pool, recreation center, basketball court and baseball field. the town council wants to provide the facilities which will be used by the most people, but they face budget and land limitations. the town has $400,000 and 14 acres of land. the pool requires locker facilities which would be in the recreation center, so if the swimming pool is built the recreation center must also be built. also, the council has only enough flat land to build the basketball court or the baseball field. the daily usage and cost of the facilities (in $1,000) are shown below. which facilities should they build? facilityusagecost ($1,000)landswimming pool4001002recreation center5002003basketball court3001504baseball field2001005