On June 1,2013,Sutton Corporation Grants Anne an Option Under Its

question 102

Multiple Choice

On June 1,2013,Sutton Corporation grants Anne an option under its nonqualified stock option plan to acquire 300 shares of the company's stock for $12 per share.The fair market price of the stock on the date of grant is $18.The fair market value of the option is $4.How much must Anne report as income at the date of grant?

• A)$ -0-
• B)$1,200
• C)$1,800
• D)$3,600
• E)$5,400

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Definitions:

Operational Efficiency

The ability of an organization to minimize input costs while maximizing the level of output or production.

Overproduction

occurs when production exceeds the demand for a product, often leading to surplus and potential waste.

External Costs

Costs that are not borne by the producers or consumers directly involved in a transaction but are imposed on other parties or the environment.

True Cost

Encompasses all the economic, environmental, and social costs associated with the production and consumption of a good or service.