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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.)

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 contents into a spreadsheet.) 2019 S5.522 2020 $5,465 2021 $7,425 2022 $7,439 2023 $7,543 2024 57,586 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 retum of standard depreciation practices during your career. Complete the following to determine the net income for each year: (Round to the nearest integer.) 2019 2020 2021 2022 2023 2024 Income Statement (000) Sales Cost of Goods Sold S 74,950 $ (60,710) 82,415 S (66,756) 90,425$ (73,244) 99,520 $ (80,611) 108,601 S (87,967) 119,020 196.406) EBITDA S $ 5 $ S $ $ S S $ $ $ $ S Depreciation EBIT S $ $ $ S $ $ $ $ $ S Interest Expense Pre-tax Income S S S s S S S S S Taxes $ $ $ $ $ $ $ $ $ $ S Net Income $ S Data table (Click on the following icon in order to copy its contents into a spreadsheet.) Current values (000) Outstanding Debt Interest on Debt 2019 $4,775 $349 2020 $4,775 $349 2021 $4,775 $349 2022 $4,775 $349 2023 $4,775 $349 2024 $4,775 $349 2023 2024 2019 $74,950 – 60,710 2020 $82,415 – 66,756 2021 $90,425 – 73,244 2022 $99,520 – 80,611 $108,601 – 87,967 $119,020 -96,406 Income Statement (000) Sales Cost of Goods Sold EBITDA Depreciation EBIT Interest Expense Pre-tax Income Taxes Net Income ? ? ? ? ? ?

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