Equipment with a book value of $11,000 will be sold at the end of a project for a salvage value of $11,000. The tax rate is 40%. What is the tax effect resulting from the profit or loss from the sale of the equipment (where a negative number means tax is payable and a positive number means that there is a tax shield)?

a.

$-4400

b.

$4400

c.

$4700

d.

$0

Clear my choice