Question 2 C10 Compute the cost of merit pay and merit bonus based on Exhibit 10.6 Merit Pay $40,000 Based pay $40,000 Year 1 payout 2.5% New based pay Extra cost total (as of Year 1 end) Year 2 payout 2.5% New based pay Extra cost total (as of Year 2 end) Year 3 payout 2.5% New based pay Extra cost total (as of Year 3 end) Merit Bonus $40,000 Based on your computation, what is the difference in extra cost total by the end of Year 3? What caused this difference? What is the difference between Merit Pay and Merit Bonus? In your view, how do these plans impact the quality of work and organizational performance?