EBK CORPORATE FINANCE
4th Edition
ISBN: 8220103145947
Author: DeMarzo
Publisher: PEARSON
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Chapter 19, Problem 2P
Summary Introduction
To determine: The production capacity.
Introduction:
The business plan is a necessary tool for the firm to analyze and take decisions on the current and future events. The firm must concentrate on the investments, capital structure, and operations to improve its potentials and future growth of the business.
Summary Introduction
To discuss: The year in which the expansion is necessary.
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Students have asked these similar questions
Based on table 7.3, what production capacity will Kappa require each year? When will and expansion be necessary?
K
Assume that Ideko's market share will increase by 0.40 percent per year as shown in the table, (e.g., Ideko's
market share will be 10.00% in 2006). What production capacity will Ideko require each year for the next five years?
When will an expansion become necessary (i.e., when will production volume exceed the current level by 50%)?
e.
What production capacity will Ideko require each year for the next five years?
First compute the projected annual market share. Then, using these projections, calculate the projected annual
production volume: (Round the volumes to one decimal place and the percentage of market share to two
decimal places.)
dd
Sales Data
Market Size (000 units)
Market Share
Production Volume (000 units)
Data table
Growth/Year
2005
4.80%
0.40%
%
(Click on the following icon in order to copy its contents into a spreadsheet.)
- X
Ideko Sales Assumptions
Sales Data
Growth/Year
2005
Market Size (000 units)
Market Share
4.80%
10.000
0.40%
9.6%
Check answer
The table below gives a detailed forecast of the size of the market by production volume. Assume that KXS expects to capture
10.20%
of the market share in 2018 and expects that percentage will increase by
0.24%
per year. KXS currently has the capacity to produce a maximum of
1100
thousand units. What production capacity will KXS require each year? When will an expansion become necessary (that is, when will production volume exceed
1100
thousand units)?
Year 2018 2019 2020 2021 2022 2023
Production Volume (000 units)
Market Size 10,000 10,453 11,048 11,591 12,151 12,728
Chapter 19 Solutions
EBK CORPORATE FINANCE
Ch. 19.1 - Prob. 1CCCh. 19.1 - Prob. 2CCCh. 19.2 - Prob. 1CCCh. 19.2 - Prob. 2CCCh. 19.3 - What is a pro forma income statement?Ch. 19.3 - Prob. 2CCCh. 19.4 - Prob. 1CCCh. 19.4 - Prob. 2CCCh. 19.5 - Prob. 1CCCh. 19.5 - Prob. 2CC
Ch. 19.6 - Prob. 1CCCh. 19.6 - Prob. 2CCCh. 19 - Prob. 1PCh. 19 - Prob. 2PCh. 19 - Prob. 3PCh. 19 - Prob. 4PCh. 19 - Under the assumptions that Idekos market share...Ch. 19 - Prob. 6PCh. 19 - Prob. 7PCh. 19 - Prob. 8PCh. 19 - Prob. 11PCh. 19 - Calculate Idekos unlevered cost of capital when...Ch. 19 - Using the information produced in the income...Ch. 19 - How does the assumption on future improvements in...Ch. 19 - Approximately what expected future long-run growth...Ch. 19 - Prob. 16P
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