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Harvey Inc. reported net earnings of $500,000 for the year. Harvey has 200,000 shares of common stock outstanding all year. Two years ago the company

Harvey Inc. reported net earnings of $500,000 for the year. Harvey has 200,000 shares of common stock outstanding all year. Two years ago the company granted 20,000 stock options that allow employees to purchase shares for $15 each. The company stock has averaged $20 in the market during the year. Compute the basic and diluted EPS.

A. basic EPS $2.50; diluted EPS $2.44

B. basic EPS $2.50; diluted EPS $2.50

C. basic EPS $2.50; diluted EPS $2.27

D. basic EPS $2.44; diluted EPS $2.44

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