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ABC Corporation Inc. (ABC) owns 60% of the voting common shares of Reich Corporation Ltd. (RCL), while Tie Co owns 25%, and Platinum Inc. (PI)

ABC Corporation Inc. (ABC) owns 60% of the voting common shares of Reich Corporation Ltd. (RCL), while Tie Co owns 25%, and Platinum Inc. (PI) owns the remaining 15%. ABC has significant intercompany transactions with RCL. Tie Co and PI have no intercompany transactions with RCL. ABC appoints eight of RCL's 10 board members; Tie Co and PI each appoint one board member. Which of the following statements is true? 



Tie Co has no influence over RCL and should classify their investment in RCL as a passive investment. 



ABC should classify its investment in RCL as an associate since it does not have control of RCL. 



Tie Co and PI have significant influence over RCL. 



Tie Co has significant influence over RCL

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