Question $12$

Last year Paseo Tissues had $$10$ million in operating income $($EBIT$).$ Its depreciation expense was $$2$ million, its interest expense was $$2$ million, and its corporate tax rate was $40\%.$ At year$-$end, it had $$28$ million in current assets, $$6$ million in accounts payable, $$2$ million in accruals, $$4$ million in notes payable, and $$30$ million in net plant and equipment. Paseo uses only debt and common equity to fund its operations. $($In other words, Paseo has no preferred stock on its balance sheet.$)$ Paseo had no other current liabilities. Assume that Paseo's only noncash item was depreciation$\mathrm{.}10$ million$4\mathrm{.}80$ million$3\mathrm{.}5$ million$14$ millionNone of these are correct