Thanks a lot for your responses.
I thought the digital inputs have internal pull up or is that installed externally?
About wiring, Please see attached image. My understanding is that R3 is internal and I would like to find the value of that.
I looked at Siemens S7 datasheet. Based on the DO numbers, R3 would be 8k. Voltage simulations shows PLC input is not getting close to 0 V in low state. I am concerned that the threshold wont be met and be detected by the PLC as a low.