Assuming that Ideko's market share after 2005 will increase each year, the required production volume for the following five years are shown here: (see chart) 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 $14.3 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 6.9%) through2010. Consider an income tax rate of 35%. Ideko's balance sheet for 2005 is shown here(see chart below)

Sales Data

Growth/Year

2005

2006

2007

2008

2009

2010

Market Size (000 units)

5.00%

10,200.00

10,710.00

11,245.50

11,807.80

12,398.20

13,018.10

Market Share

0.65%

10.30%

10.95%

11.60%

12.25%

12.90%

13.55%

Production Volume (000 units)

1,050.60

1,172.70

1,304.50

1,446.50

1,599.40

1,764.00

Estimated 2005 Balance Sheet Data for Ideko Corporation
Balance Sheet ($ 000)
Assets
Cash and Equivalents	6164
Accounts Receivable	18493
Inventories	6165
Total Current Assets	30822
Property, Plant, and Equipment	49500
Goodwill	72332
Total Assets	152654
Liabilities and Stockholders' Equity
Accounts Payable	4654
Debt	96700
Total Liabilities	101354
Stockholders' Equity	51300
Total Liabilities and Equity	152654