Ef 311. Under the assumption that KMS's market share will increase by 0.24% per year, you determine that the plant willrequire an expansion in 2015. KMS's current outstanding debt, the interest on the debt, and the interest tax shield aregiven in the table below. The expansion will cost $20.7 million. Assuming that the financing of the expansion will bedelayed accordingly (end of 2015), calculate the projected interest payments and the amount of the projected interesttax shields (assuming that KMS still uses a 10-year bond, interest rates remain the same at 7.5%, and KMS's tax rateis 35%) through 2018.Current values ($000)Outstanding debt before expansionInterest on debt before expansionInterest Tax Shield before expansion2013$4,746$356$1252014UNE$4,746$356$125The total projected interest payments beginning in 2015 will be $2015$4,746$356$12520162017$4,746 $4,746$356$356$125$125(Round to the nearest dollar.)2018$4,746$356$125

A loan is a financial arrangement in which one or more people, companies, or other entities lend…

Answered: Under the assumption that KMS's market…

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter4: Financial Planning And Forecasting

Section: Chapter Questions

Problem 6P

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