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Assuming that Ideko's market share after 2005 will increase each year, the required production volume for the following five years are shown here (GRAPH


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Assuming that Ideko's market share after 2005 will increase each year, the required production volume for the following five years are shown here (GRAPH 1): Ideko's production plant will require an expansion in 2010 (when production volume will exceed the current level by 50%), and the cost of this expansion will be $14.1 million. Assuming the financing of the expansion will be delayed accordingly, calculate the projected interest payments and the amount of the projected interest tax shields (assuming that the interest rates on the term loans is 6.7%) through 2010. Consider an income tax rate of 35%. Ideko's balance sheet for 2005 is shown here (GRAPH 2): (round to $ 000.) 2005 Please provide answers in blanks for years 2005-2010: Debt and Interest ($ 000) Outstanding Debt Interest on Term Loan 6.7% Interest Tax Shield GRAPH 1: Sales Data Growth/Year 2005 Market Size (000 units) 5.10% 10,100 2006 10,615.1 2007 11,156.5 2008 11,725.5 Market Share 0.45% Production Volume (000 units) 10.30 1,040.3 10.75 1,141.1 11.20 1,249.5 11.65 1,366.0 2009 12,323.5 12.10 1,491.1 2010 12,952.0 12.55 1,625.5 GRAPH 2: Estimated 2005 Balance Sheet Data for Balance Sheet ($ 000) Assets Ideko Corporation Cash and Equivalents 6,164 Accounts Receivable 18,493 Inventories 6,165 Total Current Assets 30,822 Property, Plant, and Equipment 49,500 Goodwill 72,332 Total Assets 152,654 Liabilities and Stockholders' Equity Accounts Payable 4,654 Debt 112,800 Total Liabilities 117,454 Stockholders' Equity 35,200 Total Liabilities and Equity 152,654 THROUGH 2010

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