Software Entrepreneurial Venture (Scenario)

question 88

Multiple Choice

Software Entrepreneurial Venture (Scenario)
Talal and Jibran have formed an entrepreneurial venture to develop software for banks and other financial institutions. Their company is growing, but in looking for opportunities in the future, they decide to explore international operations.
-Talal and Jibran decide to allow a firm in Europe to use the rights to their software, its brand name, and software specifications in return for a lump-sum payment. The firm is a service organization that plans to use the software to assist its customers. This agreement is known as a ________.

• A) licensing agreement
• B) foreign subsidiary
• C) franchise
• D) strategic alliance

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Definitions:

Inventory

Items, such as raw materials, work-in-progress, and finished goods, that a company holds with the intention of selling them.

Operating Activities

Day-to-day business functions and transactions that affect a company's net income, primarily revenue and expense activities.

Net Income

The amount of money that remains after subtracting all expenses, taxes, and costs from total revenue.

Cash Dividends

Payments made by a corporation to its shareholder members. It is the share of profits distributed.