In 2011 (year 0), Mrs. Linsey 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 2018, she sold the 225 shares for $480 per share. Assuming that Mrs. Linsey is in the 35 percent tax bracket, has a 15 percent capital gains rate, and uses a 6 percent discount rate, compute the 2011 NPV of the cash flows from the exercise and sale if:

a. The stock option was nonqualified.

b. The stock option was an ISO.

Assume the taxable year is 2018.