Red Snail Satellite Company has a total asset turnover ratio of 3.50x, net annual sales of $40 million, and operating expenses of $18 million (including depreciation and amortization). On its balance sheet and income statement, respectively, it reported total debt of $2.50 million on which it pays a 7% interest rate. What is the company's EBIT?

$12.00 million

$22.00 million

$31.00 million

$16.00 million

$26.00 million