Sales Data

Growth/Year

2005

2006

2007

2008

2009

2010

Market Size (000 units)

4.90%

10,100.0

10,594.9

11,114.1

11,658.7

12,230.0

12,829.3

Market Share

0.45%

10.30%

10.75%

11.20%

11.65%

12.10%

12.55%

Production Volume (000 units)

1,040.3

1,139.0

1,244.8

1,358.2

1,479.8

1,610.1

Estimated 2005 Balance Sheet Data for

Ideko Corporation

Balance Sheet($ 000)

Assets

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 andStockholders' Equity

Accounts Payable

4,654

Debt

114,900

Total Liabilities

119,554

Stockholders' Equity

33,100

Total Liabilities and Equity

152,654

.

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 $ 15.3 million. Assuming the financing of the expansion will be delayedaccordingly, calculate the projected interest payments and the amount of the projected interest tax shields(assuming that the interest rates on the term loans is 6.4 %) through 2010. Consider an income tax rate of 35 % Ideko's balance sheet for 2005 is shown here