A corporation has decided to replace an existing machine with a newer model. The old machine had an initial purchase price of $35,000, and has $22,000 in accumulated depreciation. If the 40% tax rate applies to the corporation and the old asset can be sold for $10,000, what will be the tax effect of the replacement? O No tax effect Refund of $1,750 O Loss of $1,750 Refund of $1,200 O Loss of $1,200