Company X purchased equipment for $200,000 with a salvage value of $20,000 and useful life of 6 years. The equipment has been depreciated for three years. At the beginning of the fourth year, the company determined that the salvage value is $10,000 and the useful life is 8 years. What is the depreciation expense in year 4?

$12,500

$23,750

$14,000

$20,000