The Compensation Package for Divisional Managers of Grant Enterprises Consists

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