With Respect to the Types of Organizational Structures, Some Advertising

question 106

Multiple Choice

With respect to the types of organizational structures, some advertising agencies prefer the departmental system because

• A)it completely avoids the usage of a commission system to compensate ad agencies.
• B)it gives employees the opportunity to develop expertise in servicing a variety of accounts.
• C)it converts a full-function advertising agency into a creative boutique.
• D)it avoids the involvement of the top management in the decision-making processes.
• E)it allows the creative team and the media team to work together as a group.

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Definitions:

Bond Amortization

The gradual reduction of the bond discount or premium over the life of the bond, affecting the bond's book value and interest expense calculations.

Effective-Interest Method

A method of calculating the amortized cost of a bond or loan by applying the effective interest rate to the outstanding balance at each period.

Private Companies

Privately held entities that are owned by individual investors, families, or a small group of shareholders, not available for public trading.

Market Interest Rate

The prevailing rate of interest available in the market for securities of similar risk and maturity.