Mike Mulligan Excavation Inc. has one Caterpillar 345DL Hydraulic Excavator. It was purchased at the beginning of 20X4 for $288,115. The excavator is in Class 43 with a 30% depreciation rate. Assume that the corporate tax rate is 35% and that Mikes cost of capital is 10%. What is the present value of tax shields (as of the terminal year) if Mike sells the 345DL at the end of 20X5 for $188,571?

Responses -$5,000 -$5,000 -$4,500 -$4,500 -$4,000 -$4,000 -$5,500