Assumptions Value

Sales price per unit, year $1($$$)5\mathrm{.}00$

Sales price increase, per year $(\%)2\mathrm{.}00$

Initial sales volume, year $1,$ units $1,000,000$

Sales volume increase, per year $(\%)8\mathrm{.}00$

Production costs per unit, year $1($$$)3\mathrm{.}00$

Production cost per unit increase, per year $(\%)4\mathrm{.}00$

General and administrative expenses per year $($$$)130,000$

Depreciation expenses per year $($$$)78,000$

Spot exchange rate $($Peso$=$US$$1\mathrm{.}00)$ Year $0$: $6\mathrm{.}00$ Year $1$: $7\mathrm{.}00$ Year $2$: $8\mathrm{.}00$ Year $3$: $9\mathrm{.}00$

Finisterra's WACC $($pesos$)(\%)15\mathrm{.}70$

Terminal value discount rate $(\%)19\mathrm{.}60$ Calculate the cash flow in year $1$ below:$($Round to the nearest whole number. The sales price and cost per unit must be rounded to the nearest$$ cent.$)$

Year $1$

Year $2$

Year $3$

Sales price per unit $($$$)$

$

$5\mathrm{.}00$

Sales volume

$1,000,000$

Revenue

$

$5000000$

Costs per unit $($$$)$

$

$(3\mathrm{.}00)$

Total costs

$3000000$

Gross profit

$

$2000000$

Less general and administrative expenses

$(130,000)$

$(130,000)$

$(130,000)$

Less depreciation expenses

$(78,000)$

$(78,000)$

$(78,000)$

Operating profit before taxes

$

Less U$.$S$.$ corporate income taxes $(35\%)$

Net income

$

Dividends distributed $($$$)$

$

$(76\%$ of net income$)$

Exchange rate $($Ps$/$$$)$

$7\mathrm{.}00$

$8\mathrm{.}00$

$9\mathrm{.}00$

Dividends remitted to parent $($pesos$)$

Ps

Additional taxes due in Mexico

$0$

$0$

$0$

Dividends received, after$-$tax $($pesos$)$

Ps

Terminal value $($$$)($discounted at $19\mathrm{.}60\%)$

$($dividend in year $4/0\mathrm{.}196)$

Terminal value $($pesos$)$

Total cash flow for discounting $($pesos$)$

Ps