Vaughn Starts Wind Systems to Make and Sell Turbines

question 19

Multiple Choice

Vaughn starts Wind Systems to make and sell turbines. Later, Vaughn contracts with Xi to invest additional capital in the firm in exchange for 25 percent of the profits. Vaughn and Xi are not partners in Wind Systems because

• A)they do not share the profits equally.
• B)their agreement does not provide for the sharing of losses.
• C)Vaughn started the firm before Xi agreed to invest additional capital.
• D)they do not have joint control over the business.

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Definitions:

Illustrate

To explain or make something clear by using examples, pictures, or diagrams.

Both Parties

Refers to the two sides or entities involved in a discussion, negotiation, or legal matter.

Identify Interests

The process of recognizing and understanding one's own preferences, desires, and areas of focus or concern.

Ambiguity

Refers to uncertainty or inexactness of meaning in language.