Kasper Film Co. is selling off some old equipment it no longer needs because its associated project has come to an end. 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 25%. 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. $6,512
b. $6,202
c. $6,837
d. $5,611
e. $5,906
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Kasper Film Co. is selling off some old equipment it no longer needs because its associated...
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