A Joint Venture Is an Attractive Way for a Company

question 19

Multiple Choice

A joint venture is an attractive way for a company to enter a new industry when

• A)the firm is missing some essential skills or capabilities or resources and needs a partner to supply the missing expertise and competencies or fill the resource gaps.
• B)the firm needs access to economies of scope and good financial fits in order to be cost-competitive.
• C)it is uneconomical for the firm to achieve economies of scope on its own initiative.
• D)the firm has no prior experience with diversification.
• E)the firm has not built up a hoard of cash with which to finance a diversification effort.

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Definitions:

Scored Tablet

A tablet medication marked with a line that allows it to be easily split into equal doses.

Bias

A tendency to lean in a certain direction, either in favor of or against a particular thing, person, or group compared with another, often in a way considered to be unfair.

Journalizing

The process of recording a transaction entry into the journal.

Business Transactions

Financial activities or exchanges involving the transfer of value between entities or parties, affecting the financial position of a business.