Continuing from the prior question: at the end of Year 2, the factories break down and are written down to $0, and the $100 loan must be repaid in full. Walk through Year 2.

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Accepted Answer

Start of Y2 PPE = $90. IS: Depreciation $10 (normal) + Write-down $80 + Interest $10 = $100 in pretax expenses.

Continuing from the prior question: at the end of Year 2, the factories break down and are written down to $0, and the $100 loan must be repaid in full. Walk through Year 2.

Answer

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