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In a bad economy, a CEO has a 4% chance of meeting earnings estimates at the regular effort and a 6% at the extraordinary effort.

In a bad economy, a CEO has a 4% chance of meeting earnings estimates at the regular effort and a 6% at the extraordinary effort. Extraordinary effort costs the CEO $10,000 in the extra effort. How large of a bonus should the CEO be paid for meeting estimates to encourage extraordinary effort?

Select one:

a. $100,000

b. $500,000

c. $200,000

d. $250,000

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