Midstream Ltd and Delta Ltd Enter into a Business Undertaking

question 11

Multiple Choice

Midstream Ltd and Delta Ltd enter into a business undertaking in which they each commit 50-hectare vineyards.There is a contractual agreement between the two companies whereby they share control and must agree on all strategic financial and operating decisions relating to the two vineyards.The two companies appoint Todman Management Pty Ltd as the manager of the vineyard undertaking.A separate set of accounting databases is established for the undertaking and each investor contributes additional cash capital to the undertaking and hold assets other than the vineyards as tenants in common.The intention of the investing companies is to take their proportionate share of the produce from the two vineyards to use in their own wineries.The business undertaking is:

• A) a joint venture operation because the investors have agreed to a sharing of control and to a sharing of the outputs of the vineyard.
• B) a joint venture entity because 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.
• D) none of the above.

Distinguish between environmental factors and personal or internal factors affecting small businesses.

Analyze the role of personal characteristics in successful entrepreneurship.

Understand the concept of a triggering event in the start-up process.

Differentiate between entrepreneurs and small business managers/owners.

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Definitions:

Frustration

The blocking of goal-directed activity. According to the frustration-aggression hypothesis, frustration leads to aggression.

Aggression

Behavior intended to harm or intimidate others, which can be physical, verbal, or psychological.

Equity

Fairness and justice in the distribution of resources and treatment of individuals within a society.

Rewards

Benefits, monetary or otherwise, given to individuals as recognition for their efforts, achievements, or behavior.