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Can you please explain the PPE adjustment?
PPE adjustment = $6,772m – $3,200m = $3,572m
how does the loan settlement affect the PPE?
thanks
The question says that the proceeds will be used firstly to pay off the loan notes, then to increase the current assets, and the remainder will be invested in PPE.
The proceeds are 7674.
3200 is used to pay off the loan notes. The current assets are increased by 902 (3249 – 2347).
This leaves 7674 – 3200 – 902 = 3572 to increase the PPE
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