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Liberty Services is now at the end of the final year of a project. The equipment was purchased prior to the new tax law and

Liberty Services is now at the end of the final year of a project. The equipment was purchased prior to the new tax law and originally cost $20,000, of which 75% has been depreciated. The firm can sell the used equipment today for $6,000, and its tax rate is 25%. What is the equipments after-tax salvage value for use in a capital budgeting analysis? Note that if the equipment's final market value is less than its book value, the firm will receive a tax credit as a result of the sale that will offset income from the companys other projects.

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