Eight Years Ago, Acnex Inc

question 79

Multiple Choice

Eight years ago, Acnex Inc. granted Ms. Cardena a nonqualified option to purchase 1,000 shares of Acnex stock at $44 per share. On date of grant, the market price was $42 per share. This year, Ms. Cardena exercised the option when the market price was $75 per share. Which of the following statements is true?

• A) Ms. Cardena recognizes $31,000 ordinary income, and Acnex is allowed a $31,000 deduction this year.
• B) Ms. Cardena recognizes $31,000 ordinary income, and Acnex is allowed a $44,000 deduction this year.
• C) Ms. Cardena recognizes $33,000 ordinary income, and Acnex is allowed a $33,000 deduction this year.
• D) Ms. Cardena recognizes $33,000 ordinary income, and Acnex is allowed a $44,000 deduction this year.

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Definitions:

Different Situation

refers to a divergent or distinct condition, circumstance, or context from what is considered normal or usual.

Primary Reinforcer

A stimulus that is naturally rewarding and satisfying, and requires no learning to become desirable, such as food or water.

Innately Satisfying

Actions or objects that are inherently pleasurable and do not require learning to be enjoyed.

Learning

The process of acquiring knowledge or skills through experience, study, or being taught.