1. Why do companies make investments in other companies? Whatare the differences

1. Why do companies make investments in other companies? Whatare the differences between debt and equity investments? What wouldinfluence a company to choose equity or debt as an investment?2. How do the various classifications of investments affectfinancial statements? What is the rationale behind the differentaccounting methods for the various investment classifications?Which is more important when determining the accounting method forsecurities influence or ownership? Explain why.