A) Karsted Air Services is now in the final year of a project. The equipment originally cost $28 million, of which 100% has been depreciated. Karsted can sell the used equipment today for $8 million, and its tax rate is 30%. What is the equipment's after-tax salvage value. Write out your answer completely. For example, 13 million should be entered as 13,000,000. Round your answer to the nearest dollar.

B)

Your company, CSUS Inc., is considering a new project whose data are shown below. The required equipment has a 3-year tax life. Under the new law, the equipment used in the project is eligible for 100% bonus depreciation, so the equipment will be fully depreciated at t = 0. The equipment has no salvage value at the end of the projects life, and the project does not require any additional operating working capital. Revenues and operating costs are expected to be constant over the project's 10-year expected operating life. What is the project's Year 4 cash flow?

Equipment cost	$70,000
Sales revenues, each year	$38,500
Operating costs	$25,000
Tax rate	25.0%

a. $16,875

b. $15,958

c. $10,800

d. $10,125

e. $13,500