A hedge fund currently has assets of $500 million. The annual fee structure of this fund consists of a fixed fee of 1% of portfolio assets plus a 20% incentive fee. The fund applies the incentive fee to the gross return each year in excess of the portfolio’s previous high watermark, which is the maximum fund value in the past two years. The fund is closed to new investors and the maximum value that the fund has achieved in the past two years was $520 million. Compute the fee that the manager will earn, in dollars, if the return on the fund in the coming year turns out to be:

a. 30% b. 2% c. -2%