Information for Hobson Corp. for the current year ($ in millions):

Income from continuing operations before tax	$	155
Loss on discontinued operation (pretax)		32
Temporary differences (all related to operating income):
Accrued warranty expense in excess of expense included in operating income		10
Depreciation deducted on tax return in excess of depreciation expense		25
Permanent differences (all related to operating income):
Nondeductible portion of entertainment expense		5

The applicable enacted tax rate for all periods is 25%. How much tax expense on income from continuing operations would be reported in Hobson's income statement?

• $36.25 million.

• $38.75 million.

• $40.0 million.

• $32.5 million.