A consulting firm must decide now whether to hire a young engineer. The main purpose of this engineer would be to work on a contract that the firm hopes to win. This new contract will begin in 2 months and last for 4 months. If the firm hires the engineer and wins the contract, the firm will make a profit of $6000 on the new contract (this figure allows for the cost of the new engineer during the 4 months of the contract). During the new employee's first 2 months (before the new contract begins), he can be assigned to various projects, reducing overtime costs for other employees by $1200 per month. The cost of employing this engineer (salary, taxes, and benefits) is $2,000 per month, so it is clear that the firm will lose money on him for his first 2 months. If the firm hires the engineer but does not win the contract, it cannot fire him until he has completed 3 months of work. During the third month he will not really be needed, and the work he will do will be worth only $400 to the firm. If the firm does not hire the engineer but wins the contract, it will be forced to hire somebody in a rush. There is only a 45% chance that it would be able to find another young qualified engineer on such notice for $2000/month, and if it is unable to find one it will have to pay $3,000/month for an experienced engineer to work 4 months on the project.