GK
ACCOUNTING
|
Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
|
|
|
adds to the pre-existing productive capacity
|
|
|
gives rise to increased amounts of market power
|
|
|
yields cost reductions unavailable to parent firms
|
|
|
enters markets neither parent could have entered individually
|
Detailed explanation-1: -Joint Venture is governed by partnership Act. Therefore, profit or loss will be shared as per agreement. However, in the absence of any agreement, profit or loss will be shared equally.
Detailed explanation-2: -the communication between partners is not great. the partners expect different things from the joint venture. the level of expertise and investment isn’t equally matched. the work and resources aren’t distributed equally.
Detailed explanation-3: -The research revealed that the internal factors of balanced control as well as similar commitment, and the external factor of a well-developed infrastructure are the crucial key success factors from a Sino-German JV perspective.
Detailed explanation-4: -IJVs allow the partners to move quickly, cost effectively and with credibility (provided by the reputation of the resident partner) in the local marketplace. The parties to an IJV can also take advantage of complementary lines of business and synergies that may exist between the two companies.