Company ABC is planning to purchase the equipment for a new project. The equipment costs 15 million and is expected to last for 5 years. It will be depreciated linearly across the 5 years and its book value in the end of Year 5 is zero. However, it is still expected to be sold at 1 million in the end of Year 5. An alternative plan is to sell the equipment in the end of Year 3 at a price of 8 million. The tax rate is 20% and the cost of capital is 10%. The difference in the present value of the cash flows from the two selling plans (Year 3 selling minus Year 5 selling) is closest to

a. 5.51 million.

b. 6.10 million.

c. 6.80 million.

d. 5.21 million.