Your firm uses a straight-line depreciation method for all its equipment in its financial reports. The firm recently bought a piece of machinery with the characteristics given below. What amount will your firm record as a deferred tax asset or liability in the fourth year of this machinery's use?

Useful life of machinery in years	6
Total acquisition cost	$150,000
Your firm's marginal tax rate	35%

Depreciation rates allowed by the tax authorities:

Year	1	2	3	4	5	6
Depreciation rate	24%	32%	20%	12%	12%	0%

		Deferred tax liability of $2,450
		Deferred tax liability of $3,850
		Deferred tax asset of $2,450
		Deferred tax asset of $3,850