Harvey Inc. reported net earnings of $700,000 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 20,000 shares for $15 each. The company stock has averaged $20 in the market during the year. Compute the basic and diluted EPS.

Group of answer choices

basic EPS $3.50; diluted EPS $3.50

None of these is correct.

basic EPS $3.41; diluted EPS $3.41

basic EPS $3.50; diluted EPS $3.41

basic EPS $3.50; diluted EPS $2.34