The Royal Motor Company manufactures automobiles. Nonmanagement employees of the company can buy a new automobile for Royal's cost plus $2\%.$

The automobiles are sold to dealers at cost plus $20\%.$ Generally, management employees of Local Dealer, Inc., are allowed to buy a new automobile from

the company at the dealer's cost. Which of the following statements is correct?

a$.$ The nonmanagement employees who buy automobiles at a discount are not required to recognize income from the purchase.

b$.$ All $$ these choices are correct.

C$.$ Employees of Royal are required to recognize as gross income $18\%(20\%-2\%)$ of the cost of the automobile purchased.

d$.$ None of the employees who take advantage of the fringe benefits described above are required to recognize income.