Question 2-Budgeting and performance measurement (30 points) Figure 2.A Optimal performance budget Expectations Budget budget level Adverse budget variance Performance Actual performance Easy Budget difficulty Difficult 2. Considering Fig. 2.A, explain-in your own words-the link between budget difficulty, aspiration levels and performance. In this regard, note that: (1) budget difficulty refers to the difficulty in achieving the budget; (2) aspirational levels refer to the goal of the person who is responsible for the budget; and (3) performance refers to overall firm performance. Points: 10, word limit: 250. Your answer goes here. 3. Considering Fig. 2.A, explain why it can be optimal to give "high-performing" employees easier targets than "low-performing" employees. Points: 10, word limit: 250. Your answer goes here. 4. Discuss and explain the advantages and disadvantages of a bonus system that gives an employee a bonus of 50% of their base salary if they reach their target, which gradually increases to 100% of their base salary if they reach their target twice (see Fig. 2.B below). Points: 10, word limit: 250. Figure 2.B Bonus system 100 80 60 Bonus (% of salary) 40 0.5 1.5 2 Performance (% of budget-target)