An excerpt from the balance sheet of Knight Inc. is as follows:

Dec. 31, 2018 Dec. 31, 2019

Inventory $ 32,000,000 $ 35,000,000

In the notes to the financial statements, Knight Inc.s Inventory Footnote appeared as follows:

"The Inventory numbers presented on the balance sheet are compiled on a LIFO basis. Under the LIFO method, the cost assigned to items sold is based on the cost of the most recent items purchased. As a result, the costs of the first items purchased remain in inventory and are used to value ending inventory. The excess of estimated current costs over LIFO carrying value, or LIFO reserve, was $12,000,000 and $17,000,000, respectively.

Assume that Knight Inc. paid corporate income tax at a rate of 20% in all years since the firm began operations.

Determine the cumulative savings of income taxes that Knight Inc. has enjoyed as a result of using LIFO rather than FIFO.

-$3,400,000

-None of other answer choices is correct

-$1,000,000

-$10,400,000