The Main Difference Between an Equity and a Nonequity Alliance

question 20

Multiple Choice

The main difference between an equity and a nonequity alliance is that

• A) equity alliances are restricted to two partners while nonequity alliances may have any number of partners involved.
• B) while equity alliances involve ownership, nonequity alliances are contractual relationships without ownership.
• C) equity alliances require that each partner own an equal percentage of the new organization that is formed, while nonequity alliances involve unequal proportions of ownership between partners.
• D) equity alliances are allowed between U.S. firms, but U.S. firms must make nonequity alliances with international firms.

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Definitions:

Gross Profit

The profit a company makes after deducting the costs associated with making and selling its products, or the costs associated with providing its services.

Profit Centers

Segments or areas within an organization that are responsible for generating their own revenues and profits.

Square Footage

Square Footage is a measurement of area used primarily in the United States to indicate the size of a space, such as a room, house, or building, measured in feet.

Production Departments

Specific areas or divisions within a manufacturing facility focused on producing particular goods or services.