Which of the Following Is a Disadvantage of Network Structures

question 42

Multiple Choice

Which of the following is a disadvantage of network structures?

• A) The central core of network structures is relatively small and the surrounding networks tend to expand or shrink continuously.
• B) There is a potential to experience a lack of loyalty among contractors who are used infrequently.
• C) A network structure is characterized by lack of flexibility which leads to problems while dealing with changing environments.
• D) Network structures are broad and complex.
• E) Network structures tend to increase overheads of an organization and reduce its operating efficiency.

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Definitions:

Factoring

Factoring is a financial transaction where a business sells its accounts receivable to a third party at a discount in exchange for immediate cash.

Capital Investment Analysis

The process of evaluating the potential returns of an investment in fixed assets or long-term projects versus its costs.

Risk-Return Trade-Off

The principle that potential return rises with an increase in risk.

Leveraged Buyout Analysis

A financial transaction analysis in which a company is purchased using a significant amount of borrowed money to meet the cost of acquisition.