The table below gives a detailed forecast of the size of the market by production volume. Assume that KMS expects to capture 10.20% of the market share in 2019 and expects that percentage will increase by 0.27% per year. KMS currently has the capacity to produce a maximum of 1,100,000 units. What production capacity will KMS require each year? When will an expansion become necessary (that is, when will production volume exceed 1,100,000 units)? Year Production Volume (000 units) Market Size KMS's market share for 2019 is KMS's market share for 2020 is KMS's market share for 2021 is 2019 KMS's market share for 2022 is 10,000 KMS's market share for 2023 is 2020 11,046 The Tax Cuts and Jobs Act of 2017 temporarily allows 100% bonus depreciation (effectively expensing capital expenditures). However, we will still include depreciation forecasting in this chapter and in these problems in anticipation of the return of standard depreciation practices during your career. 10,412 units. (Round to the nearest integer.) units. (Round to the nearest integer.) units. (Round to the nearest integer.) units. (Round to the nearest integer.) units. (Round to the nearest integer.) KMS's market share for 2024 is units. (Round to the nearest integer.) When will an expansion become necessary (that is, when will production volume exceed 1,100,000 units)? (Select the best choice below.) D 2021 OA. In 2022, production will exceed 1,100,000 units and production capacity will have to be increased. OB. In 2020, production will exceed 1,100,000 units and production capacity will have to be increased. OC. In 2019, production will exceed 1,100,000 units and production capacity will have to be increased. OD. In 2021, production will exceed 1,100,000 units and production capacity will have to be increased. 2022 2023 11,570 2024 12,117 12.749
The table below gives a detailed forecast of the size of the market by production volume. Assume that KMS expects to capture 10.20% of the market share in 2019 and expects that percentage will increase by 0.27% per year. KMS currently has the capacity to produce a maximum of 1,100,000 units. What production capacity will KMS require each year? When will an expansion become necessary (that is, when will production volume exceed 1,100,000 units)? Year Production Volume (000 units) Market Size KMS's market share for 2019 is KMS's market share for 2020 is KMS's market share for 2021 is 2019 KMS's market share for 2022 is 10,000 KMS's market share for 2023 is 2020 11,046 The Tax Cuts and Jobs Act of 2017 temporarily allows 100% bonus depreciation (effectively expensing capital expenditures). However, we will still include depreciation forecasting in this chapter and in these problems in anticipation of the return of standard depreciation practices during your career. 10,412 units. (Round to the nearest integer.) units. (Round to the nearest integer.) units. (Round to the nearest integer.) units. (Round to the nearest integer.) units. (Round to the nearest integer.) KMS's market share for 2024 is units. (Round to the nearest integer.) When will an expansion become necessary (that is, when will production volume exceed 1,100,000 units)? (Select the best choice below.) D 2021 OA. In 2022, production will exceed 1,100,000 units and production capacity will have to be increased. OB. In 2020, production will exceed 1,100,000 units and production capacity will have to be increased. OC. In 2019, production will exceed 1,100,000 units and production capacity will have to be increased. OD. In 2021, production will exceed 1,100,000 units and production capacity will have to be increased. 2022 2023 11,570 2024 12,117 12.749
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Transcribed Image Text:**Market Volume Forecast and Production Planning**
The table below presents a detailed forecast of market size by production volume for the upcoming years. Assume KMS plans to capture 10.20% of the market share in 2019, with the expectation that this percentage will increase by 0.27% annually. KMS can currently produce up to 1,100,000 units. When will it be necessary to expand production capacity?
### Market Size Forecast (in thousands of units)
| Year | Market Size (000 units) |
|------|-------------------------|
| 2019 | 10,000 |
| 2020 | 10,412 |
| 2021 | 11,046 |
| 2022 | 11,570 |
| 2023 | 12,117 |
| 2024 | 12,749 |
### Additional Information
The Tax Cuts and Jobs Act of 2017 permits 100% bonus depreciation, which effectively expends capital expenditures. This chapter will include depreciation forecasting to anticipate a return to standard practices.
### KMS Market Share Calculations
- KMS's market share for 2019 is ____ units. (Round to the nearest integer.)
- KMS's market share for 2020 is ____ units. (Round to the nearest integer.)
- KMS's market share for 2021 is ____ units. (Round to the nearest integer.)
- KMS's market share for 2022 is ____ units. (Round to the nearest integer.)
- KMS's market share for 2023 is ____ units. (Round to the nearest integer.)
- KMS's market share for 2024 is ____ units. (Round to the nearest integer.)
### Expansion Requirement
At what point will KMS need to expand production capacity as the market volume surpasses 1,100,000 units? Choose the correct option:
- A. In 2022, production will exceed 1,100,000 units, necessitating an increase in capacity.
- B. In 2020, production will exceed 1,100,000 units, necessitating an increase in capacity.
- C. In 2019, production will exceed 1,100,000 units, necessitating an increase in capacity.
- D. In 2021, production will exceed 1,100,000 units, necessitating an increase in capacity.
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