The equity method records the initial purchase of an investment in voting common stock at _____. Each period, the investor treats as revenue its share of the _____ of the investee. The investor treats dividends declared by the investee as _____
a. acquisition cost; dividends; income
b. acquisition cost; periodic earnings; a reduction of the investor's investment in stock of the investee account
c. present value of future cash flows; dividends; a reduction of the investor's investment in stock of the investee account
d. present value of future cash flows; periodic earnings; a reduction of the investor's investment in stock of the investee account
e. future value of present cash flows; dividends; a reduction of the investor's investment in stock of the investee account
B
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Melody Company sells a product for $14, variable costs are $10 per unit, and total fixed costs are $5,040. If Melody wants to earn an operating profit of $880, how many units must it sell?
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