A factory machine was purchased for $125,000 on January 1, 2012. It was estimated that it would have a $25,000 salvage value at the end of its 5-year useful life. It was also estimated that the machine would be run 40,000 hours in the 5 years. The company ran the machine for 4,000 actual hours in 2012. If the company uses the units-of-activity method of depreciation, the amount of depreciation expense for 2012 would be:

a. $12,500. b. $20,000. c. $25,000. d. $10,000.