(1) Ivanhoe Ltd is a large organisation with many independent operating departments. A major challenge within this organisation is:

a. to minimise organisational losses.

b. taking advantage of the specialised knowledge and skills of a manager.

c. to earn maximum profits through fair practices.

d. obtaining goal congruence among the organisation's autonomous managers.

(2) A new start up firm is designing a new product for the building industry. The company believes that the product can be sold for $750; and it requires a 20% profit on new products. What is the target cost of the new product?

a. $650

b. $605

c. $620

d. $600

(3) The managers at Santos Enterprises have been presented with an evaluation of two potential capital investments. Each of these investments will cost $70,000 initially. Project A will return annual cash flows of $35,000 in each of three years. Project B will return $17,500 in year 1, $35,000 in year 2, and $52,500 in year 3. The firm requires a minimum rate of return of 10%. What is the net present value of Project A? (ignore taxes)

a. $10,000.00

b. $12,835.00

c. $11,265.00

d. none of the given answers