The Compensation Package for Divisional Managers of Grant Enterprises Consists

question 18

Multiple Choice

The compensation package for divisional managers of Grant Enterprises consists of (1) a salary of £80,000, (2) a bonus of 25 percent of the increase in divisional income, and (3) stock options for 2,000 shares of Grant stock. The options permit the managers to purchase the stock at £60 per share. The Western Division reported divisional income of £700,000 for last year and £850,000 for the current year. This year the Western Division's manager exercised stock options for 2,000 shares of Grant stock when the market price was £80 per share.
The total amount of compensation for the Western Division's manager is

• A) £117,500
• B) £157,500
• C) £230,000
• D) £237,500

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Definitions:

Ordinance of 1785

A law that regulated land sales in the Old Northwest. The land surveyed was divided into 640-acre plots and sold at $1 per acre.

Self-Government

A form of government in which the people govern themselves without external control.

Apportioning

The process of distributing or allotting something among various parties, often used in the context of legislative representation or resource allocation.

Northwest Territory

The historical region of the United States that encompassed the area northwest of the Ohio River, established by the Northwest Ordinance of 1787, and fundamental in the country's expansion westward.