Which of the Following Is a Disadvantage of Joint Ventures

question 63

Multiple Choice

Which of the following is a disadvantage of joint ventures as a means to acquire new technology?

• A) It is the most expensive and time-consuming way to develop new technology.
• B) It makes a firm solely dependent on its internal development capabilities.
• C) Coordination costs can be high and organizational cultures can clash, limiting the outcomes.
• D) Purchase of a company can be expensive.
• E) It fails to establish a new company.

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Definitions:

Broker Commission

A fee paid to a broker for executing a transaction or providing specialized services.

Temporary Investments

Investments in securities that are expected to be sold within a short period, typically within one year.

Current Assets

Assets that are expected to be converted into cash, sold, or consumed within one year or within the operating cycle of the business, whichever is longer.

Cash Equivalents

Investments that are liquid and short-term, easily turned into a specific amount of cash, with their initial durations being three months or shorter.