Which of the Following Is True About Joint Venturing

question 2

Multiple Choice

Which of the following is true about joint venturing?

• A) Contract manufacturing gives significant control to the domestic firm.
• B) Companies are required to invest in the construction of foreign-based facilities.
• C) Licensing is a highly complex method for entering global markets.
• D) A host country partner is necessary for selling or marketing products.
• E) Management contracting is highly risky for the domestic firm.

---

Definitions:

Additional Paid-In Capital

The amount of money investors have paid for shares in a company above the stated par value of those shares.

Partial Equity Method

An accounting method used for investments, where the investor recognizes part of the investee's income based on the percentage owned.

Unamortized Trademark

The portion of a trademark's cost that has not yet been expensed over its useful life.

Equity Method

An accounting technique used by firms to assess the profits earned through their investment in other companies by reporting these earnings as income.