Housing Services (HS) is considering a project that involves setting up a temporary housing facility in an area recently damaged by a flood. HS estimates that this project will generate $25 million in revenues during its first year, operating expenses are expected to total $12 million during this year and depreciation expense will be another $3 million. HS has a marginal tax rate of 20%. HSs free cash flow for the first year of operation is closest to what value?

Select one:

a. $16.0 million

b. $4.0 million

c. $12.0 million

d. $8.0 million