Entrepreneurs' intentions are based on their perception of feasibility rather than someone else's impression of whether it is feasible.

True

Explanation:

Entrepreneurs are such type of people who do things and think differently. They are the driving force and do not like being bounded to corporate or any other bureaucracy. So, being an entrepreneur is doing what you think is feasible rather than following someone else's opinion.

The gross profit is $ 6,240,000.00  

The gross profit under the second  pricing arrangement is $ 3,744,000.00  

The correct answer to the last is A,$3.50 transfer price set for all transfers.

The reason is that $3.50 is the highest suggested transfer price capable of reducing the profit of Peanut Butter division to the lowest ebb.

Explanation:

This question is better answered using spreadsheet approach in order that all the number can be spread out and the calculations can be followed through.

In the first computation I considered that all the output should be sold at $3.50 while the second involves selling 2,400,000 pounds at $3.50 per pound while the reserved quantity  of 1,600,000 was sold internally at $1.94 as suggested by the manager.