Ford Motor Company Data for the year ended December 31, 2023:

• Property, Plant, and Equipment (PPE) cost: $12,000,000
• Accumulated depreciation: $5,000,000
• Estimated salvage value: $2,000,000
• Remaining useful life: 7 years
• Annual depreciation expense: $1,000,000
• Calculate the book value of PPE.
• Determine the new depreciation expense if the estimated useful life is reduced to 6 years.
• Discuss the financial statement impact of this change in estimate.
• How does the Conservatism Principle justify this change in depreciation?