Henri owns and operates a small successful sporting goods store. He has not had a holiday for three vears. He decides to take an extensive one-year trip around the world and is negotiating with Marie to operate the store while he is away. The store's earnings are highly dependent on how hard the manager works, as per the following table: a;: Work Hard as: Shirk Net Income Prob. Net Income Prob. %y High Earnings $300 0.7 $300 0.2 X Low Earnings 580 0.3 %80 0.8 Marie, like most people, is risk-averse and effort-averse. Her utility for money is equal to the square root of the amount of money received. If she works hard, her effort disutility is 2. If she shirks, her effort disutility is 1.6. Marie informs Henri that she is willing to accept the manager position but that she must receive at least an expected utility of 3.41, or she would be better off to work somewhere else. Henri, who is not an agency theory expert, offers Marie a salary of $20 plus 3% of the store earnings (after deducting $20 salary from the earnings in the table). Marie immediately accepts