Merrell Corp. discontinued a component of its business on October 17. For the year, the discontinued component had operating income of $4,000,000. At the time of the sale, the assets of the discontinued component had book values of $10,000,000 and were sold for $12,000,000. Income from operations of the continuing parts of the company were $14,000,000 for the year. Assuming a 40% tax rate, what amount would Merrell report as income from discontinued operations?
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