The consultancy Imagination Inc. is working with its manufacturing client Parts-R-Us to improve their on-time performance. The firm can earn a bonus of up to $1,000,000 based on how much the on-time performance actually improves. It's current (baseline) on-time performance is 90%. The company typically completes approximately 1,000 orders per month, with approximately 100 orders delayed. The bonus payment is prorated according to the following criteria:

The on-time performance improvement is calculated based on a reduction in late events or an improvement in on-time performance.

No bonus is earned for the first 25% reduction in late events, say from 100 to 75. Maximum bonus is earned once Parts-R-Us achieves 95% on-time performance.

Please answer the following:

1. Write down a formula to determine the total bonus amount to be received

2. Using your formula, show how much bonus would be paid if Parts-R-Us achieves 95% on-time performance.