Mr. Taliaferro is studying for an accounting test and has developed the following questions about investments. 1.

Question:

Mr. Taliaferro is studying for an accounting test and has developed the following questions about investments.

1. What are three reasons why companies purchase investments in debt or stock securities?

2. Why would a corporation have excess cash that it does not need for operations?

3. What is the typical investment when investing cash for short periods of time?

4. What are the typical investments when investing cash to generate earnings?

5. Why would a company invest in securities that provide no current cash flows?

6. What is the typical stock investment when investing cash for strategic reasons?

Instructions

Provide answers for Mr. Taliaferro.

Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may...