Under the assumption that KXS's market share will be 0.23% higher in each subsequent year, you...
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Under the assumption that KXS's market share will be 0.23% higher in each subsequent year, you determine that the plant will require an expansion in 2020. The expansion will cost $21.8 million. Assuming that the financing of the expansion will be delayed accordingly (end of 2020), calculate the projected interest payments and the amount of the projected interest tax shields through 2023 (assuming that KXS still uses a 10-year bond, interest rates remain the same at 6.8%, and KXS's tax rate is 35%). Current values ($000) Outstanding debt before expansion Interest on debt before expansion Interest tax shield before expansion 2018 $4,683 $318 $111 2019 $4,683 $318 $111 The total projected interest payments starting in 2021 will be $ The interest tax shields starting in 2021 will be $ Projected values $(000s) Accounts Receivable Inventory Cash Accounts Payable 2020 $4,683 $318 $111 2018 14,258 14,980 2021 $4,683 $318 $111 . (Round to the nearest dollar.) 11,954 11,960 . (Round to the nearest dollar.) 5. Assuming that KXS's market share will increase by 0.23% per year, you determine that the plant will require an expansion in 2020. The expansion will cost 20.9 million. Assume the following: the financing of the expansion will be delayed accordingly (end of 2020), KXS uses a ten-year bond, interest rates remain the same, and KXS's tax rate is 35%. Using the accompanying table of projected values, calculate KXS's additional annual working capital requirements through 2023. ¹ Click the icon to view the table of projected values through 2023. The additional annual working capital requirements for 2019 will be $ The additional annual working capital requirements for 2020 will be $ The additional annual working capital requirements for 2021 will be $ The additional annual working capital requirements for 2022 will be $ The additional annual working capital requirements for 2023 will be $ 1: Table of Projected Values 2022 $4,683 $318 $111 thousand. (Round to the nearest integer.) thousand. (Round to the nearest integer.) thousand. (Round to the nearest integer.) thousand. (Round to the nearest integer.) thousand. (Round to the nearest integer.) 2019 15,605 16,445 13,178 13,170 2020 17,115 18,054 14.467 14,469 2023 $4,683 $318 $111 2021 18,816 19,892 15,827 15,834 2022 20,663 21,781 17.330 17,462 2023 23,004 23,724 19,047 19,485 Under the assumption that KXS's market share will be 0.23% higher in each subsequent year, you determine that the plant will require an expansion in 2020. The expansion will cost $21.8 million. Assuming that the financing of the expansion will be delayed accordingly (end of 2020), calculate the projected interest payments and the amount of the projected interest tax shields through 2023 (assuming that KXS still uses a 10-year bond, interest rates remain the same at 6.8%, and KXS's tax rate is 35%). Current values ($000) Outstanding debt before expansion Interest on debt before expansion Interest tax shield before expansion 2018 $4,683 $318 $111 2019 $4,683 $318 $111 The total projected interest payments starting in 2021 will be $ The interest tax shields starting in 2021 will be $ Projected values $(000s) Accounts Receivable Inventory Cash Accounts Payable 2020 $4,683 $318 $111 2018 14,258 14,980 2021 $4,683 $318 $111 . (Round to the nearest dollar.) 11,954 11,960 . (Round to the nearest dollar.) 5. Assuming that KXS's market share will increase by 0.23% per year, you determine that the plant will require an expansion in 2020. The expansion will cost 20.9 million. Assume the following: the financing of the expansion will be delayed accordingly (end of 2020), KXS uses a ten-year bond, interest rates remain the same, and KXS's tax rate is 35%. Using the accompanying table of projected values, calculate KXS's additional annual working capital requirements through 2023. ¹ Click the icon to view the table of projected values through 2023. The additional annual working capital requirements for 2019 will be $ The additional annual working capital requirements for 2020 will be $ The additional annual working capital requirements for 2021 will be $ The additional annual working capital requirements for 2022 will be $ The additional annual working capital requirements for 2023 will be $ 1: Table of Projected Values 2022 $4,683 $318 $111 thousand. (Round to the nearest integer.) thousand. (Round to the nearest integer.) thousand. (Round to the nearest integer.) thousand. (Round to the nearest integer.) thousand. (Round to the nearest integer.) 2019 15,605 16,445 13,178 13,170 2020 17,115 18,054 14.467 14,469 2023 $4,683 $318 $111 2021 18,816 19,892 15,827 15,834 2022 20,663 21,781 17.330 17,462 2023 23,004 23,724 19,047 19,485
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Answer To calculate the projected interest payments and the amount of the projected interest tax shields through 2023 as well as the additional annual working capital requirements and their effect on ... View the full answer
Related Book For
Fundamentals of Corporate Finance
ISBN: 978-0133400694
1st canadian edition
Authors: Jonathan Berk, Peter DeMarzo, Jarrad Harford, David A. Stangeland, Andras Marosi
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