Forecast Ideko's free cash flow, assuming Ideko's market share will increase by 0.60 percent per year; investment, financing, and depreciation will be adjusted accordingly; and the projected improvements in working capital do not occur (that is, the numbers in the table remain at their 2005 levels through 2010, and Ideko's working capital requirements through 2010 will be as shown). 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 $15.4 million. This amount will be borrowed from a financial institution at interest rate of 6.8%. The new projected capital investments are shown, while the income statement is provided (Assume an income tax rate of 35%.)

Forecast Ideko's free cash flow, assuming Ideko's market share will increase by 0.60 percent per year; investment, financing, an occur (that is, the numbers in the table remain at their 2005 levels through 2010, and Ideko's working capital requirements thr production volume will exceed the current level by 50%), and the cost of this expansion will be $15.4 million. This amount will are shown, while the income statement is provided (Assume an income tax rate of 35%.) Sales Data Market Size (000 units) Market Share Average Sales Price ($/unit) Cost of Goods Data Raw Materials ($/unit) Direct Labor Costs ($/unit) Operating Expense Data Sales and Marketing (% sales) Administrative (% sales) Interest on Term Loan ($ 000) Ideko's Working Capital Requirements Working Capital Days Assets Accounts Receivable Raw Materials Finished Goods Minimum Cash Balance Liabilities Wages Payable Other Accounts Payable Working Capital ($ 000) Assets Accounts Receivable Raw Materials Finished Goods Minimum Cash Balance Total Current Assets Liabilities Wages Payable Other Accounts Payable Total Current Liabilities Net Working Capital Increase in Net Working Capital Fixed Assets and Capital Investment ($ 000) 2005 4,950 -5,550 New Investment Depreciation Estimated 2005 Income Statement for Ideko Corporation Income Statement ($ 000) Sales Cost of Goods Sold Raw Materials Direct Labor Costs Gross Profit Sales and Marketing Administrative EBITDA Depreciation EBIT Interest Expense (net) Pretax Income Income Tax Net Income Calculate Ideko's free cash flow through 2010 below: Round to the nearest $ 000 Free Cash Flow ($ 000) Net Income Plus: After-Tax Interest Expense Unlevered Net Income Plus: Depreciation Less: Increase in NWC Less: Capital Expenditures Free Cash Flow of Firm Plus: Net Borrowing Less: After-Tax Interest Expense Free Cash Flow to Equity t per year; investment, financing, and depreciation will be adjusted accordingly; and the projected improvements in working capital do not o's working capital requirements through 2010 will be as shown). Ideko's production plant will require an expansion in 2010 (when ll be $15.4 million. This amount will be borrowed from a financial institution at interest rate of 6.8%. The new projected capital investment Growth/Year 2005 2006 2007 2008 2009 2010 4.90% 10,200.00 10,699.80 11,224.10 11,774.10 12,351.00 12,956.20 0.60% 10.05% 10.65% 11.25% 11.85% 12.45% 13.05% 1.90% 75.66 77.1 78.56 80.06 81.58 83.13 0.90% 3.90% 15.48 17.82 15.62 18.51 15.76 19.24 15.9 19.99 16.04 20.77 16.19 21.58 15.09 18.17 -74 16.49 15.17 -6,868 17.89 15.17 -6,868 19.29 14.17 -6,868 19.69 13.17 -6,868 19.69 13.17 -6,868 quirements 2005 Days Based on: Sales Revenue Raw Materials Costs Raw Materials+Labor Costs Sales Revenue Direct Labor+Admin Costs Raw Materials+Sales and Marketing 2005 90 45 45 30 > 2005 Days 90 45 45 30 15 45 15 45 2006 2007 2008 2009 2010 19,124 1,956 4,209 6,375 31,664 21,663 2,194 4,795 7,221 35,873 24,461 2,453 5,448 8,154 40,516 27,541 2,735 6,173 9,180 45,629 30,930 3,042 6,979 10,310 51,261 34,656 3,375 7,873 11,552 57,456 1,330 3,399 4,729 26,935 1,415 3,980 5,395 30,478 3,543 1,617 4,641 6,258 34,258 3,780 1,796 5,392 7,188 38,441 4,183 1,991 6,087 8,078 43,183 4,742 2,260 6,787 9,047 48,409 5,226 apital Investment ($ 000) 2006 4,950 -5,490 2007 4,950 -5,436 2008 4,950 -5,387 2009 4,950 -5,344 2010 20,350 -6,844 2007 2008 2009 2010 orporation 77,559 -15,869 -18,267 43,423 -11,704 -14,092 17,627 -5,550 12,077 -74 12,003 -4,201 7,802 2006 ments in working capital do not xpansion in 2010 (when w projected capital investments