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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 $12,000, of which 75% has been depreciated. The firm can sell the used equipment today for $3,600, and its tax rate is 25%. What is the equipment's 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 expenses from the company's other projeets.
a. $3,600
b. $3,150
c. $2,700
d. $3,450
e. $3,750
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