The table below gives a detailed forecast of the size of the market by production volume. Assume that KMS expects to capture 10.00% of the market share in 2013 and expects that percentage will increase by 0.29% per year. KMS currently has the capacity to produce a maximum of 1,100,000 units. What production capacity will KMS require each year? When will an expansion become necessary (that is, when will production volume exceed 1,100,000 units)?
2013 2014 2015 2016 2017 2018 Year Production Volume (000 units) Market Size 10,000 10,430 11,018 11,550 12,185 12,754 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. KMS’s market share for 2013 is units. (Round to the nearest integer.)
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