Midstream Ltd and Delta Ltd Enter into a Business Undertaking

question 15

Multiple Choice

Midstream Ltd and Delta Ltd enter into a business undertaking to lease a 100-hectare vineyard from Pinot Ltd.There is a contractual agreement between the two companies whereby they share control and must agree on all strategic financial and operating decisions.The two companies appoint Todman Management Pty Ltd as the vineyard manager.A separate set of accounting database is established for the undertaking and each investor contributes cash capital to the undertaking and holds the assets as tenants in common.Each of the investing companies enters into a separate agreement with the vineyard manager to sell the produce of the vineyard in the market on their behalf.The business undertaking is:

• A) A joint venture operation since the investors have agreed to a sharing of control and to a sharing of the produce of the vineyard.
• B) A joint venture entity since the undertaking has been established as a separate entity in which there is a simple sharing of control.
• C) A simple partnership in which two companies operate as partners in a business undertaking with the intention of making a profit.
• D) None of the above.

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Definitions:

Hardy-Weinberg Equilibrium

A principle stating that the genetic variation in a population will remain constant from one generation to the next in the absence of disturbing factors.

Allele Frequencies

The relative frequencies of different alleles of a particular gene in a given population.

Genotype Frequencies

The distribution of the different genetic constitutions within a population.

Fixing Beneficial Allele

The process by which a favorable genetic variant becomes present in all individuals within a population due to natural selection.