What is the nature of the investment for slokan inc

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Slokan Inc. and Matcho Inc. agreed to incorporate a new entity with each party having 50% of the voting rights. The agreement states that 51% of the votes must be achieved for a vote to pass.

The purpose of the new entity is to build and operate a gold mine in Peru. One party will provide the mining expertise and the other party will provide local knowledge and contacts. If either party wants out of the arrangement, a first option on the shares goes to the other party.

Problem 1: What is the nature of this investment for Slokan Inc.?

a) A joint operation

b) A subsidiary

c) An associate

d) A joint venture

Reference no: EM132554843

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