In 2009 (year 0), Mrs. L exercised a stock option by paying $100 per share for 225 shares of ABC stock. The market price at date of exercise was $312 per share. In 2016, she sold the 225 shares for $480 per share. Assuming that Mrs. L is in the 35 percent tax bracket, has a 15 percent capital gains rate, and uses a 6 percent discount rate, compute the 2009 NPV of the cash flows from the exercise and sale if:
a. The stock option was non-qualified.
b. The stock option was an ISO.