Guided Walkthroughs
The $10 Depreciation Walk, Extended — Step 6 of 10: Extension — now assume it's Year 1 and the depreciation comes from a $10 asset we BUY with cash on day one, depreciated straight-line over 5 years. Walk Year 1 end-to-end.
Model answer
At purchase: IS — nothing (capex is capitalized, not expensed). CFS — investing outflow −$10. BS — cash −10, PP&E +10; balances. Then Year 1 depreciation = 10 / 5 = $2: IS — pre-tax −2, taxes −0.50,…
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