Trout Corp

question 9

Multiple Choice

Trout Corp., Kirgo Ltd., and Sturgeon Inc., three of the leading construction companies in the United States, have decided to join hands and create a new cement manufacturing company.According to their agreement, Trout Corp.will have 50 percent equity, Kirgo Ltd.will have 20 percent equity, and Sturgeon Inc.will have 30 percent equity.In this given scenario, Sturgeon Inc.is referred to as a ________.

• A)minority JV partner
• B)majority JV partner
• C)sole proprietor
• D)franchisor

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Definitions:

Payback Method

Payback Method is a capital budgeting technique that calculates the time required for an investment to generate cash flows sufficient to recover the initial investment cost.

Investments

Assets or items acquired with the intention of generating income or appreciation over time, including stocks, bonds, real estate, or other vehicles.

Liquidity

The simplicity of turning an asset into cash without impacting its market value.

Terminal Value

An estimate of a project's or company's value at the end of a forecast period, extending beyond the period of explicit cash flow projections.