Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
Related questions
Question
What is a joint venture? Give some reasons joint ventures may be advantageous
to the parties involved.
Expert Solution
Step 1
When two or more firms agree to combine their resources and form a venture with the purpose of achieving their desired objectives is known as joint venture.
Step 2
Features of joint venture:
- It is a temporary partnership with some special purpose.
- It is an agreement between two parties where they pool their resources such as employees, capital, technology, etc.
- The members of joint ventures are called as co-ventures
- The profit from the venture is shared between co-ventures at an agreed proportion or equally.
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