shootingstar

I can't see how calculating BV gives the right answer. But CFI includes cash from sale and purchase of P&E. So cash from sale of equipment=decrease in asset+gain on sale=80,000+22,000=102,000. "Accumulated dpn are igonored when they don't represent cash expenses.' However, in this case,dpn expense in year 2 is 31,000 while accumulated dpn increase by 6,000. so the net dpn expense is 25,000. Subtract 25,000 from 102,000 gives the answer 7,700.
I don't know my calculation is right though. that's the way I understand it.