Which of the Following Is an Advantage of Establishing a Joint

question 31

Multiple Choice

Which of the following is an advantage of establishing a joint venture?

• A) Joint ventures with local partners do not face any risk of being subject to nationalization or other forms of adverse government interference.
• B) Joint ventures give a firm a tight control over subsidiaries that it might need to realize experience curve or location economies.
• C) When the development costs and/or risks of opening a foreign market are high, a firm might gain by sharing these costs and or risks with a local partner.
• D) The firm is deprived of the knowledge of the host country's competitive conditions, culture, language, etc.

---

Definitions:

Carrying Value

The amount at which an asset is recognized in the balance sheet, subtracting any accumulated depreciation or amortization.

Maturity

The date on which a financial instrument or obligation becomes due and is to be paid or settled.

Face Value

The nominal value printed on a bond or stock certificate, representing its legal value.

Straight-Line Method

A depreciation technique that allocates an equal amount of depreciation expense for an asset over its useful life.