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Under the assumption that KMS's market share will increase by 0.23% per year, you determine that the plant will require an expansion in 2021. The expansion will cost $21.5 million. Assume the following: the debt financing of the expansion will be delayed accordingly (end of 2021), KMS uses a ten-year bond, interest rates remain the same at 7.3%, and KMS's tax rate is 25%. KMS projects the following depreciation: (Click on the following icon in order to copy its contents into a spreadsheet.) EBIT Interest Expense Pre-tax Income Taxes Net Income $ Complete the following to determine the net income for each year: (Round to the nearest integer.) Income Statement (000) Sales Cost of Goods Sold EBITDA Depreciation $ $ 2019 $5,522 Depreciation (000) Using this information and the data given here, project net income through 2024. 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. 2019 74,950 $ (60,710) $ $) $ $ $ $ $ $ $ $ $ 2020 82,415 $ (66,756) $ 2020 $5,465 $ $ $ $ $ $ 2021 90,425 $ (73,244) $ $ $ $ $ $ $ II 2022 99,520 $ (80,611) 2021 $7,425 $ $ $ $ S $ S 2023 108,601 $ (87,967) $ $ $ $ $ $ $ 2024 2022 $7,439 119,020 (96,406) 2023 $7,543 2024 $7,586

Under the assumption that KMS's market share will increase by 0.23% per year, you determine that the plant will require an expansion in 2021. The expansion will cost $21.5 million. Assume the following: the debt financing of the expansion will be delayed accordingly (end of 2021), KMS uses a ten-year bond, interest rates remain the same at 7.3%, and KMS's tax rate is 25%. KMS projects the following depreciation: (Click on the following icon in order to copy its contents into a spreadsheet.) EBIT Interest Expense Pre-tax Income Taxes Net Income $ Complete the following to determine the net income for each year: (Round to the nearest integer.) Income Statement (000) Sales Cost of Goods Sold EBITDA Depreciation $ $ 2019 $5,522 Depreciation (000) Using this information and the data given here, project net income through 2024. 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. 2019 74,950 $ (60,710) $ $) $ $ $ $ $ $ $ $ $ 2020 82,415 $ (66,756) $ 2020 $5,465 $ $ $ $ $ $ 2021 90,425 $ (73,244) $ $ $ $ $ $ $ II 2022 99,520 $ (80,611) 2021 $7,425 $ $ $ $ S $ S 2023 108,601 $ (87,967) $ $ $ $ $ $ $ 2024 2022 $7,439 119,020 (96,406) 2023 $7,543 2024 $7,586

EBK CONTEMPORARY FINANCIAL MANAGEMENT
EBK CONTEMPORARY FINANCIAL MANAGEMENT
14th Edition
ISBN:9781337514835
Author:MOYER
Publisher:MOYER
Chapter9: Capital Budgeting And Cash Flow Analysis
Section: Chapter Questions
Problem 20P
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ssumption that KMS's market share will increase by 0.23% per year, you determine that the plant will require an expansion in 2021 e debt financing of the expansion will be delayed accordingly (end of 2021), KMS uses a ten-year bond, interest rates remain the s g depreciation: (Click on the following icon in order to copy its contents into a spreadsheet.) e Data table (Click on the following icon in order to copy its contents into a spreadsheet.) Current values (000) Outstanding Debt Interest on Debt Income Statement (000) Sales Cost of Goods Sold EBITDA Depreciation EBIT Interest Expense Pre-tax Income Taxes Net Income 2019 $4,775 $349 2019 $74,950 - 60,710 ? 2020 Print $4,775 $349 2020 $82,415 - 66,756 ? 2021 $4,775 $349 2021 $90,425 - 73,244 Done ? 2022 $4,775 $349 2022 $99,520 -80,611 ? 2023 $4,775 $349 2023 $108,601 - 87,967 ? 2024 $4,775 $349 2024 $119,020 - 96,406 ? X
Transcribed Image Text:ssumption that KMS's market share will increase by 0.23% per year, you determine that the plant will require an expansion in 2021 e debt financing of the expansion will be delayed accordingly (end of 2021), KMS uses a ten-year bond, interest rates remain the s g depreciation: (Click on the following icon in order to copy its contents into a spreadsheet.) e Data table (Click on the following icon in order to copy its contents into a spreadsheet.) Current values (000) Outstanding Debt Interest on Debt Income Statement (000) Sales Cost of Goods Sold EBITDA Depreciation EBIT Interest Expense Pre-tax Income Taxes Net Income 2019 $4,775 $349 2019 $74,950 - 60,710 ? 2020 Print $4,775 $349 2020 $82,415 - 66,756 ? 2021 $4,775 $349 2021 $90,425 - 73,244 Done ? 2022 $4,775 $349 2022 $99,520 -80,611 ? 2023 $4,775 $349 2023 $108,601 - 87,967 ? 2024 $4,775 $349 2024 $119,020 - 96,406 ? X
Under the assumption that KMS's market share will increase by 0.23% per year, you determine that the plant will require an expansion in 2021. The expansion will cost $21.5 million. Assume the following: the debt financing of the expansion will be delayed accordingly (end of 2021), KMS uses a ten-year bond, interest rates remain the same at 7.3%, and KMS's tax rate is 25%. KMS projects the following depreciation: (Click on the following icon in order to copy its contents into a spreadsheet.) Sales Cost of Goods Sold EBITDA Complete the following to determine the net income for each year: (Round to the nearest integer.) Income Statement (000) 2021 90,425 $ (73,244) Depreciation EBIT Interest Expense Pre-tax Income Taxes Net Income Depreciation (000) Using this information and the data given here, project net income through 2024. 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. $ SA SA CA $ $ SA LA 2019 $5,522 LA 2019 74,950 $ (60,710) $ $ SA LA S SA 2020 82,415 $ (66,756) $ SA LA SA 2020 $5,465 LA $ $ $ $ $ SA 2022 99,520 $ (80,611) $ SA LA SA 2021 $7,425 SA 2023 108,601 $ (87,967) $ $ S GA GA SA LA 2024 2022 $7,439 119,020 (96,406) 2023 $7,543 2024 $7,586
Transcribed Image Text:Under the assumption that KMS's market share will increase by 0.23% per year, you determine that the plant will require an expansion in 2021. The expansion will cost $21.5 million. Assume the following: the debt financing of the expansion will be delayed accordingly (end of 2021), KMS uses a ten-year bond, interest rates remain the same at 7.3%, and KMS's tax rate is 25%. KMS projects the following depreciation: (Click on the following icon in order to copy its contents into a spreadsheet.) Sales Cost of Goods Sold EBITDA Complete the following to determine the net income for each year: (Round to the nearest integer.) Income Statement (000) 2021 90,425 $ (73,244) Depreciation EBIT Interest Expense Pre-tax Income Taxes Net Income Depreciation (000) Using this information and the data given here, project net income through 2024. 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. $ SA SA CA $ $ SA LA 2019 $5,522 LA 2019 74,950 $ (60,710) $ $ SA LA S SA 2020 82,415 $ (66,756) $ SA LA SA 2020 $5,465 LA $ $ $ $ $ SA 2022 99,520 $ (80,611) $ SA LA SA 2021 $7,425 SA 2023 108,601 $ (87,967) $ $ S GA GA SA LA 2024 2022 $7,439 119,020 (96,406) 2023 $7,543 2024 $7,586
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