With a recent outbreak of cholera, your firm has been granted an opportunity by the CDC to develop a low-cost immunity booster that would allow people who are forced to drink contaminated water to avoid the disease. The CDC will award your firm $600,000 for the successful development of the booster. Given the existing research on cholera, the probability of developing the product is relatively high: 80% if your chief researcher gives high effort and 60% if given low effort. However, your researcher has many alternative opportunities, and thus demands an expected compensation of $180,000. Your firm could hire another researcher at a rate of $120,000, but the success rate is 60%, equivalent to a better researcher giving low effort. Support each answer with equations!!! (moral hazed and incentive contract)

a) What is the bonus that would induce high effort by the researcher?

B). Given the bonus what is the base pay?