Assume that actual cash inflows turn out to be $91,000 per year. Determine the amount of Mr. Holts bonus if the original computation of net present value were based on $90,000 versus $70,000.

Speculate about the long-term effect the bonus plan is likely to have on the company.

As the Gaines Company ethics officer advising the financial decision-maker, recommend how to compensate managers in a way that discourages gamesmanship