RideOn, Inc

question 20

Multiple Choice

RideOn, Inc., is an automobile company that has strategic alliances with two entities: a supplier in India and a manufacturer in South Africa. RideOn's vehicles are known for being of good quality, but they are more expensive than the average person can afford. The company would like to further reduce its costs so that it can pass those savings on to the end consumer. To do this RideOn would most likely

• A)set up a liaison relationship between the South African manufacturer and a distributor in China.
• B)form a strategic alliance with a distributor in China.
• C)form a joint venture with the supplier in India.
• D)create a boundaryless structure with the manufacturer in South Africa.

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Definitions:

Depreciable Assets

Assets whose cost is allocated over their useful lives due to usage, wear and tear, or obsolescence.

Annual Depreciation

The portion of an asset's cost that is allocated as an expense each year over its useful life through the process of depreciation.

Salvage Values

Salvage Values represent the estimated residual value of an asset after its useful life has ended and it has been fully depreciated.

Useful Lives

The estimated periods of time over which fixed assets, such as machinery or buildings, are expected to be used by a business.