This Year, Nilo Inc

question 101

Multiple Choice

This year, Nilo Inc. granted nonqualified stock options to 230 employees. For financial statement purposes, Nike recorded a $179,200 expense for the estimated value of the options. As a result of this transaction, Nike has a:

• A)Temporary favorable book/tax difference
• B)Temporary unfavorable book/tax difference
• C)Permanent favorable book/tax difference
• D)Permanent unfavorable book/tax difference

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Definitions:

Paying Rent

The act of making a payment for the temporary use of a property or space owned by another individual or entity.

Present Value

The estimated value in today's terms of a sum of money or series of cash flows expected in the future, according to a specific rate of return.

Interest Rate

The percentage charged on the total amount of borrowed money or paid as earnings on investment, typically annualized.

Interest Rate

The cost of borrowing money, expressed as a percentage of the total amount borrowed, paid by the borrower to the lender for the use of their money.