The Primary Reason Some Advertisers Set Up a Wholly Owned

question 9

Multiple Choice

The primary reason some advertisers set up a wholly owned in-house ad agency is to:

• A) increase their overhead.
• B) tighten control over their advertising.
• C) stimulate external creative efforts on the part of the marketing staff.
• D) meet the challenge of ad agencies and mass media with respect to creative incentives.
• E) increase the percentage of the markup they earn.

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Definitions:

Capital Structure

The mix of a company’s long-term debt, specific short-term debt, common equity, and preferred equity, which determines its financial leverage.

Financial Manager

A professional responsible for managing an organization's financial health by making investment decisions, financing strategies, and managing risks.

Current Earnings

The net income or profit earned by a company during a particular reporting period, excluding any extraordinary items.

Capital Budgeting

The act of strategizing and overseeing a firm's long-term commitments to investments, projects, and assets.