a) Under the assumption that Ideko market sharewill increase by 0.5% per year you determine that the plant willrequire an expansion in 2010. The cost of this expansion willbe $15 million. Assuming the financing of the expansion willbe delayed accordingly, calculate the projected interest paymentsand the amount of projected interest tax shields through2010.

b.) Under the assumptionthat Ideko's market share will increase by 0.5% per year (andthe investment and financing will be adjusted as described inproblem 3), you project the following depreciation:

Year 2005 2006 2007 2008 2009 2010

Fixed assets and capital investment($0.00)

NewInvestment $5000 $5000 $5000 $5000 $5000 $5000 $20000

Depreciation (5500) (5450) (5405) (5365) (5328) (5328) (6795)

Using this information, project net income through2010

c.) under the assumptions that Ideko's market share will increase by 0.5% per year (implying that the investment, financing, and depreciation will be adjusted as above), calculate Ideko's working capital requirements through 2010