The date on which to measure the compensation element in a stock option granted to a corporate employee ordinarily is the date on which the employee1. has performed all conditions precedent to exercising the option.2. is granted the option.3. may first exercise the option.4. exercises the option.

You are evaluating two different silicon wafer milling machines. the techron i costs $285,000, has a three-year life, and has pretax operating costs of $78,000 per year. the techron ii costs $495,000, has a five-year life, and has pretax operating costs of $45,000 per year. for both milling machines, use straight-line depreciation to zero over the project’s life and assume a salvage value of $55,000. if your tax rate is 24 percent and your discount rate is 11 percent, compute the eac for both machines.