Question

Luke is the owner of Fun Times, a U.S. event-planning company. He plans to open an event-planning company, Events & Adventures, in Germany. Events & Adventures will be totally owned and controlled by Fun Times, which makes Events & Adventures a ________ of Fun Times.

a. joint ventureb. total investment agreementc. strategic allianced. wholly owned subsidiarye. maquiladora

Answer 1

Answer:

It makes Events & Adventures a ________ of Fun Times:

d. wholly owned subsidiary

Explanation:

• The option d is correct as a wholly owned subsidiary is such a company that is in ownership of another company. The company is called parent company that owns another company that is known as child or subsidiary company, that is exactly in our case because Events & Adventures will be totally owned and controlled by Fun Times.

• The option a is not correct as in joint ventures means two or more companies work together to accomplish a single goal without controlling each other.
• The option b is not correct as there is no investment agreement between these two companies as one is parent and other is child company.
• The option c is not valid as they are not strategically alliance as they may have to change the strategy in Germany for Events & Adventures.
• The option e is also not valid as Maquiladora are those companies that take unprocessed and raw material from another company and after processing, they provide the final and refined product.