Caterpillar Inc. Data for the year ended December 31, 2023:

Item	Amount
Property, Plant, and Equipment (PPE) Cost	$8,000,000
Accumulated Depreciation	$3,200,000
Estimated Salvage Value	$600,000
Remaining Useful Life	6 years
Annual Depreciation Expense	$800,000

1. Calculate the book value of PPE.
2. Determine the new depreciation expense if the estimated useful life is reduced to 5 years.
3. Discuss the financial statement impact of this change in estimate.
4. Explain the importance of the Conservatism Principle in depreciation.
5. How should the company record the change in depreciation expense?