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Mark Martin, president of Cullumber Always, agrees to construct a concrete cart path at Oriole Golf Club. Cullumber Always enters into a contract with Oriole
Mark Martin, president of Cullumber Always, agrees to construct a concrete cart path at Oriole Golf Club. Cullumber Always enters into a contract with Oriole to construct the path for $183,000. In addition, as part of the contract, a performance bonus of $37,200 will be paid based on the timing of completion. The performance bonus will be paid fully if completed by the agreedupon date. The performance bonus decreases by $9,300 per week for every week beyond the agreed-upon completion date. Mark has been involved in a number of contracts that had performance bonuses as part of the agreement in the past. As a result, he is fairly confident that he will receive a good portion of the performance bonus. Mark estimates, given the constraints of his schedule related to other jobs, that there is 50% probability that he will complete the project on time, a 30% probability that he will be 1 week late, and a 20% probability that he will be 2 weeks late
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