You are a management consultant for a private company. The company wants to revisit its bonus plan policy for its managers that oversee their different revenue centers. There are 100 revenue centers in the company and each revenue center is controlled by one manager. Each revenue center is selling similar products and is located in similar regions. The current annual bonus plan is the following: the manager receives a bonus of $100,000 if the annual sales of her or his revenue center are above $1,000,000, and receives no bonus if the annual sales of her or his revenue center are below $1,000,000. The company is thinking to adopt a new bonus plan. Under the new bonus plan, the performance of the revenue center managers would be ranked based on the annual sales of the revenue center: the manager would receive a bonus of $100,000 if the annual sales of her or his revenue center are among the top 10 revenue centers within the company, and would receive zero otherwise.Do not consider the cost of producing the products and assume that the company wants to induce their revenue center to maximize their total revenue. The company is asking your opinion about their new bonus plan policy for their revenue center managers.

(i) one potential benefit and one potential cost of the proposed bonus plan compared to the current bonus plan?

(ii) Focusing on the potential benefits of the new bonus plan, if any, do you have any recommendation on how to improve the new bonus plan policy?