Response to the following questions:
1. a. Distinguish between basic earnings per share and diluted earnings per share.
b. What is the difference between how earnings per share numbers are reported before and after 1998?
2. For the 1997 fiscal year, Intel Corporation had a net income of $6,945 million. At the beginning of the year, there were 1,642 million shares outstanding and at the end of the year there were 1,628 million shares. There are 160 million potentially dilutive shares during 1997 from employee stock option plans and warrants. Calculate Intel's 1997 basic and diluted earnings per share.