The Salvage Value of a Ten-Year-Old Truck Is $10 000

Multiple Choice

The salvage value of a ten-year-old truck is $10 000. If this truck is on the Balance Sheet of a transportation company as a Class 8 asset with a CCA rate of 20%, what was the present worth of this salvage value at the time of the truck's purchase if the corporate tax rate is 35% and annual after-tax interest rate is 5%?

A) $10 000
B) $8 200
C) $7 200
D) $6 240
E) $4 420