On january 1, year 1, manning company granted 97,000 stock options to certain executives. the options are exercisable no sooner than december 31, year 3, and expire on january 1, year 6. each option can be exercised to acquire one share of $1 par common stock for $8. an option-pricing model estimates the fair value of the options to be $4 on the date of grant. at the time of issuance, no estimate of forfeitures is made. if unexpected turnover in year 2 caused the company to now estimate that 20% of the options would be forfeited, what amount should manning recognize as compensation expense for year 2? ? annual compensation in year 2 =

$77,600

Explanation:

Total value of compensation expenses:

= No. of options granted × Fair of value options

= 97,000 × $4

= $388,000

Compensation expenses should be recognized per year:

= Total value of compensation expenses ÷ Excercisable time

= $388,000 ÷ 3

= $129,333.33

Expenses recognized in year 1 = $129,333.33

Due to unexpected turnover 20% of the options are forfeited,

Annual compensation = $388,000 × 80%

                                     = $310,400

Annual compensation in year 2:

= Accumulated compensation expenses in year 2 - Expenses recognized in year 1

= [$310,400 × (2/3)] - $129,333.33

= $206,933.33 - $129,333.33

= $77,600

the page presents four different kinds of threats that volcanoes pose and what to do before, during, and after an eruption.

the investment was $14,174.196

explanation:

a lump sum means that the father of the example made one deposit and leave it be.

we need to know the value of a capital that generated at 4.05% per year during 28 years the sum of $48,613.24

now clearing the formula to solve for capital we got:

and we reach the answer investment = $14,174.20