Question: The equity method modifies the investee's ability to manipulate earnings. Describe how an investee could have benefited from the cost method and why the equity

The equity method modifies the investee's ability to manipulate earnings. Describe how an investee could have benefited from the cost method and why the equity method limits the investee's ability with respect to earnings. Give an example of the difference in the two methods and discuss how, if you agree, the equity method provides a better answer to this issue. If you do not agree, explain your position with an example and cited.

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