In $2014,$ BB granted an incentive stock option $($ISO$)$ to Raul to buy $6,000$ shares of BB stock at $$8\mathrm{.}90$ per share for $10$ years. At date of grant, BB stock was trading on the AMEX for $$8\mathrm{.}47$ per share. In $2023,$ Raul exercised the option when BB$$s stock was trading at $$25\mathrm{.}41$ per share. Required: How much income did Raul recognize in $2014$ and $2023$ because of the ISO? Compute Raul$$s basis in the $6,000$ shares. What are the tax consequences of the stock option to BB in $2014$ and $2023?$ This year, Jordan accepted a Job with BL$,$ Incorporated. Jordan Intends to work for only elght years and then start a business. Jordan has two options for accumulating the money needed to start this business:

$-$ Option t$.$ Jordan is eligible to participate in BL$\text{'}$s Section $401($k$)$ plan and can afford to save $\backslash$$$5,000$ of salary each year by diverting it to this plan. The plan earns $5$ percent a year. Consequently, the plan balance in eight years will be $\backslash (\backslash$$ $47,746\backslash )(\backslash (\backslash$$ $5,000\backslash )$ for eight years compounded at $5$ percent$).$

$-$ Option $2.$ Jordan can take the entire salary in cash, pay Income tax, and save $\backslash (\backslash$$ $3,600(\backslash$$ $5,000\backslash )$ less $\backslash (\backslash$$ $1,400\backslash )$ tax$)$ in an investment fund that earns $5$ percent a year. Because the annual earnings are taxable, the savings in the fund will grow at only $3\mathrm{.}6$ percent a year. Consequently, the fund balance in eight years will be $\backslash (\backslash$$ $32,702\backslash )(\backslash (\backslash$$ $3,600\backslash )$ for eight years compounded at $3\mathrm{.}6$ percent$).$

Required:

a$.$ Assuming a constant $28$ percent combined federal and state tax rate, compute the after$-$tax cash flow for each options.

b$.$ Based on your analysis, which option should Jordan pursue?

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Assuming a constant $28$ percent combined federal and state tax rate, compute the after$-$tax cash flow for each options.

Note: Round your intermediate calculations to the nearest whole dollar amount.