What is the equipment net after-tax salvage value

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Reference no: EM132814247

Problem 1: Bing Services is now in the final year of a project. The equipment originally cost $20,000, of which 80% has been depreciated. Bing can sell the used equipment today for $6,000, and its tax rate is 40%. What is the equipment's net after-tax salvage value? (If the equipment's final market value is less than its book value, Bing will receive a tax credit as a result of the sale).

Select one:

a. $1,200

b. $3,200

c. $5,200

d. Neither of the above

Reference no: EM132814247

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