GAAP identifies three levels of influence/control. Which level of influence/control would a company likely use if it was investing in a company that gave it 15% of the outstanding voting stock?

Select one:

A. Passive

B. Market-level

C. Control

D. Significant Influence

Which of the following statements is not correct concerning the effects on the components of return on equity (ROE) under equity method accounting?

Select one:

a. Net operating profit margin is overstated

b. Financial leverage is understated

c. Asset turnover is understated

d. NOPAT is correctly stated