Westin Medicine is a publicly traded biotech company based in Irvine. It has 100 scientists and technician besides a team of middle managers and top executives. It awards stock options to all of its employees. The company's fiscal year ends on July 31. This year's fiscal year ends on July 31, 2020.

During the fiscal years of 2015-2018, the company had a "fixed value" stock option plans. That is, each year, the company granted its employees stock options with fair value of $100 million a year. These stock options all had a vesting period of 4 years. That is, employees had to work for the company for 4 years before they could exercise any of the stock options.

On August 1, 2019, the beginning of this fiscal year, the company modified its stock option plan. During the year, the company still granted $100 million worth of stock options, but changed the vesting period to 5 years. Assume the tax rates are 20% for all years.

It is near the end of the fiscal year. Ana Farrell, the CFO of Westin Medicine, is working hard to close the books for the current year. She is also preparing for a conference call with financial analysts and some investors. At the conference call, the CFO and CEO will explain the operating and financial performance to the audience. The CFO expects a lot of questions from the audience due to poor sales and bad debt expense related to the Covid19.

At a recent meeting with the CEO, Ana discussed with him this year's net income, cash flow, and other performance indicators. At the meeting, the CEO said he heard that many other companies in the industry report non-GAAP earnings in the conference call. The CEO would like to follow other companies' practices and asked the CFO to calculate a non-GAAP earnings by excluding stock option related compensation expense.

The CFO just finished the estimation. The non-GAAP number will meet the analyst forecast while the GAAP earnings would be below analyst forecast. She is concerned about the differences between the two earnings numbers. She is planning for another meeting with the CEO to go over the numbers before the conference call with financial analyst and investors.

Question3: What is the total stock option expense to be reported in the income statement of year 2019? Please show your workings. (20 points)