On January 1, 2011, Deema Corporation signed a ten-year noncancelable lease for certain machinery. The

terms of the lease called for Deema to make annual payments of $100,000 at the end of each year for ten

years with title to pass to Deema at the end of this period. The machinery has an estimated useful life of 15

years and no salvage value. Deema uses the straight-line method of depreciation for all of its fixed assets.

The weighted average cost of capital (WACC) for Deema Corporation is 8%.Weighted average cost of

capital for the lessor is 10%.Deema Corporation is aware of the lessor's WACC.

In addition, Deema Corporation has the following activities/ financial information for the year ending

December 31, 2011

Sales revenue........................................................................$10,000,000

Costs of good sold.......................................................................$2,000.000

Income tax rate...........................................................................40%

Weighted average number of common shares outstanding ........................10,000,000

Calculate basic earnings per share for Deema Corporation as of December 31, 2011.