1. The head estimator walks into your office and states that since your existing bonding company is raising their rates, he is considering changing to another firm called New Deal Bonding. He wants you to run the numbers so he can make a more fully informed decision about which company to use. He tells you to determine the following, based on a typical project size of $4.5 million. Show all of your work on the next page, and box and label your final answers.

• The bond cost increase for a typical project with Extant
• The cost for a typical projects bond with New Deal
• The cost difference between Extants new rates and New Deals for a typical project
• Your recommendation of which bonding company to use, based on the lowest average bond cost

Rates for Extant Bonding, LLC

Contract Price	Current Premium Cost per $1,000 of Contract Price for the First 12 Months of a Project	New Premium Cost per $1,000 of Contract Price for the First 12 Months of a Project
$1 to $100,000	$35	$45
Next $400,000	$30	$42
Next $1,000,000	$25	$37
Next $2,000,000	$20	$22
Next $2,000,000	$17	$18
Next $2,000,000	$15	$17
Over $7,500,000	$10	$11

Rates for New Deal Bonding Company

Contract Price	Premium Cost per $1,000 of Contract Price for the First 12 Months of a Project
$1 to $25,000	$150
Next $50,000	$125
Next $125,000	$110
Next $300,000	$100
Next $500,000	$45
Next $1,000,000	$17
Next $2,000,000	$11
Over $4,000,000	$9