Chapter 8.2, Problem 3R

To determine

To evaluate one of the advantage of a joint venture.

Explanation of Solution

A joint venture is a time period agreement between the involved party which is terminated at a given future date or when the project is over. Organizations joining a joint venture are not needed to build a new corporate company to complete the project, offering a degree of flexibility that is not contained in more permanent business strategies.

Participating entities also need not to relinquish ownership of their businesses to another party, nor will they need to suspend continuing business activities while the joint venture is in progress. Growing company can retain its own identity and resume regular business operations easily once the joint venture is complete.

Economics Concept Introduction

Introduction: Joint Venture may be defined as a agreement in business partnership in which more than two independent companies, for a specified time, come together to form a legally autonomous undertaking to fulfill a specific function, such as performing a task, operation, or project.