Question

Which of the following differentiates a joint venture from other forms of alliances?

A. It usually does not result in the creation of a new business entity.
B. It increases asset commitment.
C. It increases cycle time of a technology.
D. It involves a significant equity stake.

Answer 1

Answer: It increases asset commitment

Explanation: Joint venture is a type of arrangement that comes into existence when two or more parties agree to share ownership, risk and governance in a particular business operation.

Arrangements like Joint venture are usually taken by the entities for increasing customer base by entering new markets, which brings the assets to get used to their potential level leading to higher commitment.

Thus, we can conclude that option B is correct.