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 40%, what will the after-tax salvage value be when the machine is sold at the end of Year 4?

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

a. $10,900

b. $9,837

c. $8,878

d. $9,345

e. $10,335