2. On May 1, 2018, Natalicio Inc. agreed to sell the assets of its Education Division to UTEP Corp. for $75 million. The sale was completed on December 31, 2018. The following additional facts pertain to the transaction: The Education Division qualifies as a separate component of the entity according to GAAP regarding discontinued operations. The book value of Education's assets totaled $60 million on the date of the sale. Education's operating income was a pre-tax loss of $5.0 million in 2018. Natalicio's income tax rate is 40%. In the income statement for the year ended December 31, 2018, Natalicio Inc. would report income (loss) from discontinued operations of: A. $12.0 million. B. $6.0 million. C. $4.0 million. D. $(3.0 million). E. $(12.0 million). 3. Chihuahuas Inc. reported the following before-tax items during the current year: Sales revenue Selling and administrative expenses Foreign currency translation gain Gain on discontinued operations Interest expense $3,000 1,250 300 250 200 Chihuahuas' effective tax rate is 35%. What is Chihuahuas' income from continuing operations after income taxes (rounded)? A. $1,008. B. $1,333. C. $2,568. D. $2,633. E. $2,828