McPherson Company must purchase a new milling machine. The purchase price is $50,000, including installation. The machine has a tax life of 5 years, and it can be depreciated according to the following rates. The firm expects to operate the machine for 4 years and then to sell it for $12,500. If the marginal tax rate is 25%, what will the after-tax salvage value be when the machine is sold at the end of Year 4?

Year	Depreciation Rate
1	0.20
2	0.32
3	0.19
4	0.12
5	0.11
6	0.06

a. $9,367

b. $10,925

c. $11,500

d. $9,860

e. $10,379