Assignment Problem: In Year 4, the management of Orion made an offer of employment to a top-performing manager with its leading competitor. In addition to a base salary amount Orion's management offered the individual the opportunity to earn a bonus based on the firm's income above a base of $300,000. The bonus percentage is 3% of the firm income above a base level of $300,000 after tax and after bonus. The firm's tax rate is 25%.
The manager wants you to estimate the bonus assuming the firm's actual total income for the next year will be $500,000.
Required: Determine the Estimated Bonus to the Manager.
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