Disquotek, Inc

Disquotek, Inc., is a software manufacturer. Managers are considering a new equipment proposal. The income tax rate is 40%, and the discount rate is 10%. The following data are available: Old Equipment New Equipment
Purchase cost $12,000 $36,000
Annual amortization 1,500 4,500
Remaining useful life (years) 8 8
Current selling price 14,400 not applicable
Selling price in 8 years 1,000 2,000
Annual operating costs 14,000 8,000
What is the relevant after-tax cash flow associated with disposing of the new equipment at its salvage value in 8 years?

A) $2,000
B) $1,200
C) $0
D) $800