Arnold exercised an incentive stock option in 2016, acquiring 1,800 shares of stock at an option price of $160 per share. The FMV of the stock at the date of exercise was $199 per share. In 2018, the rights became freely transferable and were not subject to a substantial risk of forfeiture. Arnold sells the shares in 2019 for $264 per share. Required:
How do these transactions affect his AMTI in 2016, 2018, and 2019?

M. cotteleer electronics supplies microcomputer circuitry to a company that incorporates microprocessors into refrigerators and other home appliances. one of the components has an annual demand of 235 units, and this is constant throughout the year. carrying cost is estimated to be $1.25 per unit per year, and the ordering (setup) cost is $21 per order. a) to minimize cost, how many units should be ordered each time an order is placed? b) how many orders per year are needed with the optimal policy? c) what is the average inventory if costs are minimized? d) suppose that the ordering cost is not $21, and cotteleer has been ordering 125 units each time an order is placed. for this order policy (of q = 125) to be optimal, determine what the ordering cost would have to be.