When Two Organizations Pool Resources, Know-How, Rewards, and Risk in Order

question 7

Multiple Choice

When two organizations pool resources, know-how, rewards, and risk in order to produce and market a product, they are

• A)establishing a coalition.
• B)forming a strategic alliance.
• C)engineering a business-to-business network.
• D)outsourcing resources.
• E)creating a boundaryless organization.

---

Definitions:

Profitability Index

A calculation used to determine the relative profitability of a project by dividing the present value of future expected cash flows by the initial investment.

Present Value

The current worth of a future sum of money or cash flows, given a specified rate of return.

Internal Rate Of Return

The percentage rate that equalizes the net present value of a project's cash flows to zero.

Mutually Exclusive Projects

Investment projects where the acceptance of one negates the possibility of accepting another.