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QUESTION

1. {Rewarding Performance} Recall the linear incentive scheme in the ease of no uneantrellahle risk. Aasame that the puma-:2 measure is Equal to the

Need the answer to this PLEASE. Maybe you can use these formulas. PAY= a+ b(PM) where a is base salary, b is commission rate and PM performance measure. b is also equal to incentive intensity so basically the question asks about a and b. Since cost is given, I think we need to use this: Maximize PM- Costs (profit) but im not sure!!

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