Which of the Following Is a Disadvantage of Joint Ventures

question 73

Multiple Choice

Which of the following is a disadvantage of joint ventures as a mode of entry into foreign markets?

• A) Joint ventures with local partners face a high risk of being subjected to government interference.
• B) Joint ventures can lead to conflicts and battles for control between the investing firms.
• C) Firms engaged in joint ventures have short-term commitments in the foreign market.
• D) In many countries, political considerations make joint ventures impractical as an entry mode.
• E) The foreign firm cannot rely on its local partner for unbiased information about the host country.

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Definitions:

Restricted Fund Method

An accounting approach used for reporting funds that have restrictions placed on them by donors or grantors.

Deferral Method

An accounting technique that postpones the recognition of income or expenses until a future date.

Revenue Level

The total amount of income generated from the sale of goods or services before any costs or expenses are deducted.

GAAP

The Generally Accepted Accounting Principles represent the framework and specific rules for financial accounting and reporting in the United States, promoting consistency and clarity.