Here we are in the income statements and we need to start including the recapitalization effects here. There's only really one effect that's going to happen and it's the fees, two types of fees, the arrangement fee on the new debt and the prepayment fee on the old debt. We need to pay that fee because we've paid that old debt off early.

So this is going to create a circular because these fees here will reduce the net income. That will reduce the cash available to pay off the debt, which means we can't pay off as much debt and that affects the fees. So we have a circular going on. So we just need to control that by using an IF function. So equals IF, and I now want to say if the circular switch is on, that's on the info sheet, but we've named that so we can just type it in. So equals if circ switch equals 1 and now I want the fees to come through. You might notice that other expenses here are coming through as negatives, so I want the fees to come through as a negative as well. So I'm going to use their negative sum. And now I'll go to the recap tab. And we've got the three fees here, arrangement fee, and two prepayment. Let's sum them from column G. So if the circ switches on, bring through the negative of those fees. Otherwise give me a 0.

I'm tempted to think that's all we need to do. But remember, I only want these fees to come through if a recap is happening. So I want to multiply this by a recap switch, which will allow me to quickly turn the recap on and off. So I'm going to multiply that and the recap switch is at the top of the base case recap tablets go up to the top and there it is. You might notice that we've named it recap switch, so we can just type it in next time.

Great. That figure's come through as a 0 at the moment. If I copy it through into year three, we might expect a figure to come through, but if I do, unfortunately the figures haven't come through. Well that's just because we've got the circular switch turned off and iterations are off as well. So let's turn on our iterations to start with. So I'll go to file more options formulas and I'll enable iterative calculations. Press okay and then I'll go to the info tab and I'll turn on that circular switch. Which is put to a 1, back to the base case recap tab and we can see those fees have come through from the recap tab. Excellent. So only one change we need to make here in the income statements to carry on. I'm gonna make sure that I turn off my circular switch and I turn off my iterative calculations just so that if I make any mistakes that are circular, they won't suddenly show up.