Mushali services is now at the end of the final year of a, Ask an Expert

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Mushali Services is now at the end of the final year of a project. The equipment originally cost $22,500, 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. $5,558

b. $5,850

c. $6,143

d. $6,450

e. $6,772

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