Liberty Services is now at the end of the final year of a project.The equipment originally cost $19,000,of which 75% has been depreciated.The firm can sell the used equipment today for $6,000,and its tax rate is 40%.What is the equipment's after-tax salvage value for use in a capital budgeting analysis? Note that if the equipment's final market value is less than its book value,the firm will receive a tax credit as a result of the sale.
A) $5,500
B) $4,345
C) $5,995
D) $5,885
E) $6,710
Correct Answer:
Verified
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