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On January 1,2024, Black Incorporated issued stock options for 290,000 shares to a division manager....

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Accounting

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On January 1,2024, Black Incorporated issued stock options for 290,000 shares to a division manager. The options have an estimated fair value of \$7 each. To provide additional incentive for managerial achievement, the options are not exercisable unless divisional revenue increases by 5% in two years. Black initially estimates that it is probable the goal will be achieved. in 2025 , after one year, Black estimates that it is not probable that divisional revenue will increase by 5% in two years. Ignoring taxes, what is the effect on earnings in 2025 ? Multiple Choice $1,015,000 decrease $507,500 increase $1,015,000 increase

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