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Magnolia Manufacturing makes wing components for large aircraft.Kevin Choi is the production manager, responsible formanufacturing, and Michelle Michaels is the marketing manager. Bothmanagers are paid a flat salary and are eligible for a bonus. Thebonus is equal to 1 percent of their base salary for every 10percent profit that exceeds a target. The maximum bonus is 5percent of salary. Kevin’s base salary is $370,000 and Michelle’sis $430,000.

The target profit for this year is $9 million. Kevin has read abouta new manufacturing technique that would increase annual profit by20 percent. He is unsure whether to employ the new technique thisyear, wait, or not employ it at all. Using the new technique willnot affect the target profit.

Required:
(a)	Suppose that profit without using the technique this year willbe $9 million. By how much will Kevin’s bonus change if he decidesto employ the new technique? By how much will Michelle’s bonuschange if Kevin decides to employ the new technique?

(b)	Suppose that profit without using the technique this year willbe $11.5 million. By how much will Kevin’s bonus change if hedecides to employ the new technique? By how much will Michelle’sbonus change if Kevin decides to employ the new technique?

(c)	Suppose that profit without using the techniquethis year will be $7.5 million.
	(1)	Will Kevin's bonus change if he decides to employ the newtechnique?
		Yes No
	(2)	Will Michelle's bonus change if Kevin decides to employ the newtechnique?
		Yes No

(d)	Is it ethical for Kevin to consider the impact of the newtechnique on his bonus when deciding whether or not to use it?
	Yes No