Orange Inc

Orange Inc. issued 20,000 nonqualified stock options valued at $40,000 (in total) on December 31, 2015. The options vest entirely on December 31, 2016. The options were all exercised in 2016 with a bargain element on each option of $3. What is the 2016 book-tax difference associated with the stock options?

A) $40,000 unfavorable
B) $40,000 favorable
C) $20,000 unfavorable
D) $20,000 favorable
E) None of these

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