Under the assumption that KMS's market share will increase by 0.29% per year, you determine that...

 

Transcribed Image Text:

Under the assumption that KMS's market share will increase by 0.29% per year, you determine that the plant will require an expansion in 2015. KMS's current outstanding debt, the interest on the debt, and the interest tax shield are given in the table below. The expansion will cost $21.9 million. Assuming that the financing of the expansion will be delayed accordingly (end of 2015), calculate the projected interest payments and the amount of the projected interest tax shields (assuming that KMS still uses a 10-year bond, interest rates remain the same at 7.5%, and KMS's tax rate is 35%) through 2018. Current values (5000) Outstanding debt before expansion Interest on debt before expansion Interest Tax Shield before expansion 2013 $4,652 $349 $122 2014 $4,652 $349 $122 The total projected interest payments beginning in 2015 will be $ 2015 $4,652 $349 $122 2016 $4,652 $349 $122 (Round to the nearest dollar.) 2017 $4,652 $349 $122 2018 $4,652 $349 $122 Under the assumption that KMS's market share will increase by 0.29% per year, you determine that the plant will require an expansion in 2015. KMS's current outstanding debt, the interest on the debt, and the interest tax shield are given in the table below. The expansion will cost $21.9 million. Assuming that the financing of the expansion will be delayed accordingly (end of 2015), calculate the projected interest payments and the amount of the projected interest tax shields (assuming that KMS still uses a 10-year bond, interest rates remain the same at 7.5%, and KMS's tax rate is 35%) through 2018. Current values (5000) Outstanding debt before expansion Interest on debt before expansion Interest Tax Shield before expansion 2013 $4,652 $349 $122 2014 $4,652 $349 $122 The total projected interest payments beginning in 2015 will be $ 2015 $4,652 $349 $122 2016 $4,652 $349 $122 (Round to the nearest dollar.) 2017 $4,652 $349 $122 2018 $4,652 $349 $122

Answer rating: 100% (QA)

To calculate the total projected ... View the full answer