Cost-plus pricing is best suited for high-risk environments (p.93), such as fluctuating commodity markets. It reduces risk for suppliers by allowing cost adjustments based on actual expenses plus a margin. Option A is incorrect because low-risk projects favor fixed pricing. [P.93]

Discounted cash flow accounts for the time value of money and allows for an accurate comparison of projects with different durations.

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A screenshot of a computer Description automatically generated

Company 1 - Power Culture & Control System

The founder has centralised power, meaning this is a Power Culture.

The Control System is strong due to the strict financial management and reward structure.

Company 2 - Person Culture & Symbols

Employees work independently and focus on their own clients, indicating a Person Culture.

The Symbols aspect comes from the strong corporate branding and identity.

Company 3 - Role Culture & Organisation Structure

A Role Culture is present due to the strict hierarchy and bureaucracy.

The Organisation Structure influences this, as it determines salary and responsibilities.

Company 4 - Task Culture & Ritual

The focus on small teams and dynamic work assignments suggests a Task Culture.

The weekly meetings reflect an important ritual in the company’s culture.

Company 5 - Power Culture & Stories

Power is concentrated in senior leadership, making this a Power Culture.

The company culture is reinforced through Stories of past successes.

Net Present Value (NPV) calculations require a discount rate (p.1.4).

Bank rate (B) relates to loans, not investment decisions.

Interest rate (C) applies to borrowing, not profitability.

Return rate (D) is not the main NPV metric. [P.1.4]

Symbols (p.169) include logos, dress codes, and office layout.

Control Systems (C) refer to rules and procedures.

Rituals (D) are traditions and routines.

Power Structure (E) involves decision-making hierarchy. [P.169]

Hofstede's dimension contrasts individualism with collectivism. In individualistic cultures, the individual is prioritised over the group.

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Fixed pricing makes forecasting easier, simplifies the bidding process, and can reduce tensions between the parties. It typically does not lead to lower quotes or share cost savings with the buyer.

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Payback period = Investment Cost ÷ Annual Cash Flow = £10,000 ÷ £2,000 = 5 years.

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Changes to building regulations are mandatory because they are legally binding and require compliance.

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Acceptance Criteria should be set before the project starts in the Project Initiation Document (PID) (p.137).

Option A is too late, as the project is already completed.

Option B is iterative, but criteria should be predefined.

Option D is for evaluation, not definition. [P.137]

Stories, rituals, symbols, and control systems are part of the Cultural Web. The other two aspects of the Cultural Web (organisational structure and power structure) are not listed here.

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The correct answers are 1, 3, and 4 (p.8). Option 2 is incorrect as it describes a DBO (Design-Build-Operate) contract rather than an EPC contract. Option 5 is incorrect because it describes a PPP (Public-Private Partnership) contract, not an EPC contract. [P.8]

The team focuses on product quality and cost reduction, which defines Value Engineering (p.2.1).

Option A (CPA) is a scheduling tool.

Option C (Negotiation) focuses on contracts, not product quality.

Option D (SCM) is supply chain optimization, not product design. [P.2.1]