A Within the expansionist policy of the company, it is planned to enter the Mexican market during the year 2017 For this, it is required to present to the board of directors, the projection of the financial statements of the company from the year 2013 to 2016, in figures in Mexican pesos, therefore, you must change the currency rate from Colombian pesos to Mexican pesos by taking an exchange rate equivalent to 1 Mexican peso (MXN) per 150 Colombian pesos (COP) and use the inflation indicators provided in the projection assumptions box B It is required to present to the board of directors, the projection of the financial statements of the company for the year 2017, in which there is evidence of a growth in sales corresponding to 22 , as well as a growth in the cost of sales of 7 compared to the year 2016, which affects the income statement for the year 2017 and therefore the net income For this you must take into account that A modification in sales caused by market factors, makes anticipate changes in the cost of production or cost of sales that affects a profit before taxes, which serves as a basis for the settlement of taxes, an aspect that generates income for the country , without losing sight of the net income received by the company, its reason for being You must determine how the result of this expansion benefits the Mexican economy, as well as what monetary and fiscal benefits it receives C Based on the projection made for the years 2016 and 2017, you should consider that in order to carry out an expansion such as the one proposed in the initial paragraph, the company must resort to indebtedness equivalent to 5 of total assets This credit will be agreed with a foreign bank, at a rate equivalent to 6 annual effective, with a term of 7 years agreed in dollars at the 2016 exchange rate, according to the table of assumptions provided To do this, it calculates the WACC indicator for the years 2016 and 2017 and shows in the financial statement, the general balance of 2017 with the indebtedness and in the financial statement of results of 2017, the modified sales and cost of sales 2016 2018 Scenearios Rate of inflation bank funding interest rate to January average bank fund interest rate for one year US dollar exchange rate as of December 31 ISR Monetary and fiscal policy 2013 2014 2015 3 25 4 48 2 13 4 50 3 49 3 37 3 98 3 33 3 05 13 08 14 74 17 24 30 00 30 00 35 00 3 36 5 78 4 16 20 61 35 00 2017 6 77 6 26 6 71 19 66 35 00 4 80 7 26 7 69 19 65 35 00 Company S A December 31 figures in Colombian pesos year 2011 year 2012 Acitvos $ Box 151,285 77 $ 72,333 06 Temporary investments Miscellaneous debtors Inventory Deducted paid in advance TOTAL CURRENT long term investments Long term debtors Long term inventory Land, plant and equipment Intangible Deferred Charges Other assets Total valuations TOTAL ASSETS TO LAKE TERM TOTAL ASSETS $ 13,134 62 $ 626 78 $ 555,133 90 $ 534,569 15 $ 145,200 23 $ 110,057 36 $ 5,821 76 $ 7,635 66 $ 870,576 28 $ 725,222 01 $ 4,459,627 57 $ 3,505,691 97 $ 744,269 42 $ 635,127 31 $ 145,200 23 $ 110,057 37 $ 731,895 93 $ 685,908 46 $ 385,080 23 $ 374,151 58 $ 85,853 30 $ 106,174 75 $ 363,611 56 $ 4,751 14 $ 8,470,749 41 $ 3,022,777 41 $ 15,386,287 65 $8,444,639 99 $ 16,256,863 93 $ 9,169,862 00 PASIVOS Financial obligations Obligations in national modena Obligations in foreign modena Suppliers Accounts payable Taxes and levies Labor obligations Estimated liabilities and provisions Other liabilities Bonds and trading papers TOTAL CURRENT LIABILITIES Financial obligations Obligations in national currency Foreign currency obligations Accounts payable Estimated liabilities and olbigations Deferred liabilities Bonds and trading papers Taxes payable TOTAL LONG TERM LIABILITIES TOTAL LIABILITIES 2011 2012 $ 2,085,326 46 $ 875,121 24 $ 1,221,612 62 $ 821,023 02 $ 863,713 84 $ 54,098 22 $ 72,887 70 $ 69,261 20 $ 336,551 23 $ 365,611 63 $ 72,657 51 $ 75,725 02 $ 18,167 82 $ 19,944 90 $ 71,369 71 $ 76,935 28 $ 53,103 81 $ 44,334 49 $ 423,032 00 $ 77,200 00 $ 3,133,096 24 $ 1,604,133 76 $ 1,106,525 42 $ 529,280 52 $ 720,191 14 $ 231,740 36 $ 386,334 28 $ 297,540 16 $ 111,122 44 $ 75,857 07 $ 216,004 74 $ 222,538 69 $ 28,233 80 $ 3,114 09 $ 943,506 52 $ 993,676 39 $ 51,939 86 $ 25,969 93 $ 2,457,332 78 $ 1,850,436 69 $ 5,590,429 02 $3,454,570 45 CAPITAL Share capital Capital surplus Resrvas de capital Capital reserves Results of the exercise Sepervit by valuations TOTAL DE CAPITAL TOTAL LIABILITIES AND CAPITAL $ 7,291 49 $ 7,291 49 $ 1,037,184 56 $ 626,158 56 $ 879,124 54 $ 914,692 37 $ 902,110 91 $ 756,752 59 $ 369,974 00 $ 387,619 13 $ 7,470,749 41 $ 3,022,777 41 $ 10,666,434 91 $5,715,291 55 $ 16,256,863 93 S 9,169,862 00 Income statement Ao 2011 Ao 2012 December 31 (figures in millions of pesos) ( ) ( ) TOTAL SALES domestic sales foreign sales foreign sales GROSS PROFIT Operational expenses Administration costs Sales expenses OPERATIONAL UTILITY Non operating income Non operational costs PROFIT BEFORE TAXES Income tax NET INCOME $1,602,470 00 $1,768,330 00 $ 1,566,460 00 $ 1,753,349 00 $ 36,010 00 $ 14,981 00 $ 797,920 00 $ 853,457 00 $ 804,550 00 $ 914,873 00 $ 516,848 00 $ 1,132,790 00 $ 167,778 00 $ 395,526 00 $ 349,070 00 $ 737,228 00 $ 287,702 00 $ 217,917 00 $ 1,096,996 08 $ 1,241,742 62 $ 787,420 00 $ 470,084 00 $ 597,278 08 $ 553,741 62 $ 227,304 08 $ 166,122 49 $ 369,974 00 $ 387,619 13 ( ) ( ) 2016 2018 Scenearios Rate of inflation bank funding interest rate to January average bank fund interest rate for one year US dollar exchange rate as of December 31 ISR Monetary and fiscal policy 2013 2014 2015 3 25 4 48 2 13 4 50 3 49 3 37 3 98 3 33 3 05 13 08 14 74 17 24 30 00 30 00 35 00 3 36 5 78 4 16 20 61 35 00 2017 6 77 6 26 6 71 19 66 35 00 4 80 7 26 7 69 19 65 35 00 Company S A December 31 figures in Colombian pesos year 2011 year 2012 Acitvos $ Box 151,285 77 $ 72,333 06 Temporary investments Miscellaneous debtors Inventory Deducted paid in advance TOTAL CURRENT long term investments Long term debtors Long term inventory Land, plant and equipment Intangible Deferred Charges Other assets Total valuations TOTAL ASSETS TO LAKE TERM TOTAL ASSETS $ 13,134 62 $ 626 78 $ 555,133 90 $ 534,569 15 $ 145,200 23 $ 110,057 36 $ 5,821 76 $ 7,635 66 $ 870,576 28 $ 725,222 01 $ 4,459,627 57 $ 3,505,691 97 $ 744,269 42 $ 635,127 31 $ 145,200 23 $ 110,057 37 $ 731,895 93 $ 685,908 46 $ 385,080 23 $ 374,151 58 $ 85,853 30 $ 106,174 75 $ 363,611 56 $ 4,751 14 $ 8,470,749 41 $ 3,022,777 41 $ 15,386,287 65 $8,444,639 99 $ 16,256,863 93 $ 9,169,862 00 PASIVOS Financial obligations Obligations in national modena Obligations in foreign modena Suppliers Accounts payable Taxes and levies Labor obligations Estimated liabilities and provisions Other liabilities Bonds and trading papers TOTAL CURRENT LIABILITIES Financial obligations Obligations in national currency Foreign currency obligations Accounts payable Estimated liabilities and olbigations Deferred liabilities Bonds and trading papers Taxes payable TOTAL LONG TERM LIABILITIES TOTAL LIABILITIES 2011 2012 $ 2,085,326 46 $ 875,121 24 $ 1,221,612 62 $ 821,023 02 $ 863,713 84 $ 54,098 22 $ 72,887 70 $ 69,261 20 $ 336,551 23 $ 365,611 63 $ 72,657 51 $ 75,725 02 $ 18,167 82 $ 19,944 90 $ 71,369 71 $ 76,935 28 $ 53,103 81 $ 44,334 49 $ 423,032 00 $ 77,200 00 $ 3,133,096 24 $ 1,604,133 76 $ 1,106,525 42 $ 529,280 52 $ 720,191 14 $ 231,740 36 $ 386,334 28 $ 297,540 16 $ 111,122 44 $ 75,857 07 $ 216,004 74 $ 222,538 69 $ 28,233 80 $ 3,114 09 $ 943,506 52 $ 993,676 39 $ 51,939 86 $ 25,969 93 $ 2,457,332 78 $ 1,850,436 69 $ 5,590,429 02 $3,454,570 45 CAPITAL Share capital Capital surplus Resrvas de capital Capital reserves Results of the exercise Sepervit by valuations TOTAL DE CAPITAL TOTAL LIABILITIES AND CAPITAL $ 7,291 49 $ 7,291 49 $ 1,037,184 56 $ 626,158 56 $ 879,124 54 $ 914,692 37 $ 902,110 91 $ 756,752 59 $ 369,974 00 $ 387,619 13 $ 7,470,749 41 $ 3,022,777 41 $ 10,666,434 91 $5,715,291 55 $ 16,256,863 93 S 9,169,862 00 Income statement Ao 2011 Ao 2012 December 31 (figures in millions of pesos) ( ) ( ) TOTAL SALES domestic sales foreign sales foreign sales GROSS PROFIT Operational expenses Administration costs Sales expenses OPERATIONAL UTILITY Non operating income Non operational costs PROFIT BEFORE TAXES Income tax NET INCOME $1,602,470 00 $1,768,330 00 $ 1,566,460 00 $ 1,753,349 00 $ 36,010 00 $ 14,981 00 $ 797,920 00 $ 853,457 00 $ 804,550 00 $ 914,873 00 $ 516,848 00 $ 1,132,790 00 $ 167,778 00 $ 395,526 00 $ 349,070 00 $ 737,228 00 $ 287,702 00 $ 217,917 00 $ 1,096,996 08 $ 1,241,742 62 $ 787,420 00 $ 470,084 00 $ 597,278 08 $ 553,741 62 $ 227,304 08 $ 166,122 49 $ 369,974 00 $ 387,619 13 ( ) ( )

Question

A   Within the expansionist policy of the company, it is planned to enter the Mexican market during the year 2017  For this, it is required to present to the board of directors, the projection of the financial statements of the company from the year 2013 to 2016, in figures in Mexican pesos, therefore, you must change the currency rate from Colombian pesos to Mexican pesos by taking an exchange rate equivalent to 1 Mexican peso (MXN) per 150 Colombian pesos (COP) and use the inflation indicators provided in the projection assumptions box B   It is required to present to the board of directors, the projection of the financial statements of the company for the year 2017, in which there is evidence of a growth in sales corresponding to 22 , as well as a growth in the cost of sales of 7   compared to the year 2016, which affects the income statement for the year 2017 and therefore the net income  For this you must take into account that   A modification in sales caused by market factors, makes anticipate changes in the cost of production or cost of sales that affects a profit before taxes, which serves as a basis for the settlement of taxes, an aspect that generates income for the country  , without losing sight of the net income received by the company, its reason for being   You must determine how the result of this expansion benefits the Mexican economy, as well as what monetary and fiscal benefits it receives  C   Based on the projection made for the years 2016 and 2017, you should consider that in order to carry out an expansion such as the one proposed in the initial paragraph, the company must resort to indebtedness equivalent to 5  of total assets  This credit will be agreed with a foreign bank, at a rate equivalent to 6  annual effective, with a term of 7 years agreed in dollars at the 2016 exchange rate, according to the table of assumptions provided  To do this, it calculates the WACC indicator for the years 2016 and 2017 and shows in the financial statement, the general balance of 2017 with the indebtedness and in the financial statement of results of 2017, the modified sales and cost of sales  2016 2018 Scenearios Rate of inflation bank funding interest rate to January average bank fund interest rate for one year US dollar exchange rate as of December 31 ISR Monetary and fiscal policy 2013 2014 2015 3 25  4 48  2 13  4 50  3 49  3 37  3 98  3 33  3 05  13 08 14 74 17 24 30 00  30 00  35 00  3 36  5 78  4 16  20 61 35 00  2017 6 77  6 26  6 71  19 66 35 00  4 80  7 26  7 69  19 65 35 00  Company S A December 31 figures in Colombian pesos year 2011 year 2012 Acitvos $ Box 151,285 77 $ 72,333 06 Temporary investments Miscellaneous debtors Inventory Deducted paid in advance TOTAL CURRENT long term investments Long term debtors Long term inventory Land, plant and equipment Intangible Deferred Charges Other assets Total valuations TOTAL ASSETS TO LAKE TERM TOTAL ASSETS $ 13,134 62 $ 626 78 $ 555,133 90 $ 534,569 15 $ 145,200 23 $ 110,057 36 $ 5,821 76 $ 7,635 66 $ 870,576 28 $ 725,222 01 $ 4,459,627 57 $ 3,505,691 97 $ 744,269 42 $ 635,127 31 $ 145,200 23 $ 110,057 37 $ 731,895 93 $ 685,908 46 $ 385,080 23 $ 374,151 58 $ 85,853 30 $ 106,174 75 $ 363,611 56 $ 4,751 14 $ 8,470,749 41 $ 3,022,777 41 $ 15,386,287 65 $8,444,639 99 $ 16,256,863 93 $ 9,169,862 00 PASIVOS Financial obligations Obligations in national modena Obligations in foreign modena Suppliers Accounts payable Taxes and levies Labor obligations Estimated liabilities and provisions Other liabilities Bonds and trading papers TOTAL CURRENT LIABILITIES Financial obligations Obligations in national currency Foreign currency obligations Accounts payable Estimated liabilities and olbigations Deferred liabilities Bonds and trading papers Taxes payable TOTAL LONG TERM LIABILITIES TOTAL LIABILITIES 2011 2012 $ 2,085,326 46 $ 875,121 24 $ 1,221,612 62 $ 821,023 02 $ 863,713 84 $ 54,098 22 $ 72,887 70 $ 69,261 20 $ 336,551 23 $ 365,611 63 $ 72,657 51 $ 75,725 02 $ 18,167 82 $ 19,944 90 $ 71,369 71 $ 76,935 28 $ 53,103 81 $ 44,334 49 $ 423,032 00 $ 77,200 00 $ 3,133,096 24 $ 1,604,133 76 $ 1,106,525 42 $ 529,280 52 $ 720,191 14 $ 231,740 36 $ 386,334 28 $ 297,540 16 $ 111,122 44 $ 75,857 07 $ 216,004 74 $ 222,538 69 $ 28,233 80 $ 3,114 09 $ 943,506 52 $ 993,676 39 $ 51,939 86 $ 25,969 93 $ 2,457,332 78 $ 1,850,436 69 $ 5,590,429 02 $3,454,570 45 CAPITAL Share capital Capital surplus Resrvas de capital Capital reserves Results of the exercise Sepervit by valuations TOTAL DE CAPITAL TOTAL LIABILITIES AND CAPITAL $ 7,291 49 $ 7,291 49 $ 1,037,184 56 $ 626,158 56 $ 879,124 54 $ 914,692 37 $ 902,110 91 $ 756,752 59 $ 369,974 00 $ 387,619 13 $ 7,470,749 41 $ 3,022,777 41 $ 10,666,434 91 $5,715,291 55 $ 16,256,863 93 S 9,169,862 00 Income statement Ao 2011 Ao 2012 December 31 (figures in millions of pesos) ( ) ( ) TOTAL SALES domestic sales foreign sales foreign sales GROSS PROFIT Operational expenses Administration costs Sales expenses OPERATIONAL UTILITY Non operating income Non operational costs PROFIT BEFORE TAXES Income tax NET INCOME $1,602,470 00 $1,768,330 00 $ 1,566,460 00 $ 1,753,349 00 $ 36,010 00 $ 14,981 00 $ 797,920 00 $ 853,457 00 $ 804,550 00 $ 914,873 00 $ 516,848 00 $ 1,132,790 00 $ 167,778 00 $ 395,526 00 $ 349,070 00 $ 737,228 00 $ 287,702 00   $ 217,917 00 $ 1,096,996 08 $ 1,241,742 62 $ 787,420 00 $ 470,084 00 $ 597,278 08 $ 553,741 62 $ 227,304 08 $ 166,122 49 $ 369,974 00 $ 387,619 13 ( ) ( ) 2016 2018 Scenearios Rate of inflation bank funding interest rate to January average bank fund interest rate for one year US dollar exchange rate as of December 31 ISR Monetary and fiscal policy 2013 2014 2015 3 25  4 48  2 13  4 50  3 49  3 37  3 98  3 33  3 05  13 08 14 74 17 24 30 00  30 00  35 00  3 36  5 78  4 16  20 61 35 00  2017 6 77  6 26  6 71  19 66 35 00  4 80  7 26  7 69  19 65 35 00  Company S A December 31 figures in Colombian pesos year 2011 year 2012 Acitvos $ Box 151,285 77 $ 72,333 06 Temporary investments Miscellaneous debtors Inventory Deducted paid in advance TOTAL CURRENT long term investments Long term debtors Long term inventory Land, plant and equipment Intangible Deferred Charges Other assets Total valuations TOTAL ASSETS TO LAKE TERM TOTAL ASSETS $ 13,134 62 $ 626 78 $ 555,133 90 $ 534,569 15 $ 145,200 23 $ 110,057 36 $ 5,821 76 $ 7,635 66 $ 870,576 28 $ 725,222 01 $ 4,459,627 57 $ 3,505,691 97 $ 744,269 42 $ 635,127 31 $ 145,200 23 $ 110,057 37 $ 731,895 93 $ 685,908 46 $ 385,080 23 $ 374,151 58 $ 85,853 30 $ 106,174 75 $ 363,611 56 $ 4,751 14 $ 8,470,749 41 $ 3,022,777 41 $ 15,386,287 65 $8,444,639 99 $ 16,256,863 93 $ 9,169,862 00 PASIVOS Financial obligations Obligations in national modena Obligations in foreign modena Suppliers Accounts payable Taxes and levies Labor obligations Estimated liabilities and provisions Other liabilities Bonds and trading papers TOTAL CURRENT LIABILITIES Financial obligations Obligations in national currency Foreign currency obligations Accounts payable Estimated liabilities and olbigations Deferred liabilities Bonds and trading papers Taxes payable TOTAL LONG TERM LIABILITIES TOTAL LIABILITIES 2011 2012 $ 2,085,326 46 $ 875,121 24 $ 1,221,612 62 $ 821,023 02 $ 863,713 84 $ 54,098 22 $ 72,887 70 $ 69,261 20 $ 336,551 23 $ 365,611 63 $ 72,657 51 $ 75,725 02 $ 18,167 82 $ 19,944 90 $ 71,369 71 $ 76,935 28 $ 53,103 81 $ 44,334 49 $ 423,032 00 $ 77,200 00 $ 3,133,096 24 $ 1,604,133 76 $ 1,106,525 42 $ 529,280 52 $ 720,191 14 $ 231,740 36 $ 386,334 28 $ 297,540 16 $ 111,122 44 $ 75,857 07 $ 216,004 74 $ 222,538 69 $ 28,233 80 $ 3,114 09 $ 943,506 52 $ 993,676 39 $ 51,939 86 $ 25,969 93 $ 2,457,332 78 $ 1,850,436 69 $ 5,590,429 02 $3,454,570 45 CAPITAL Share capital Capital surplus Resrvas de capital Capital reserves Results of the exercise Sepervit by valuations TOTAL DE CAPITAL TOTAL LIABILITIES AND CAPITAL $ 7,291 49 $ 7,291 49 $ 1,037,184 56 $ 626,158 56 $ 879,124 54 $ 914,692 37 $ 902,110 91 $ 756,752 59 $ 369,974 00 $ 387,619 13 $ 7,470,749 41 $ 3,022,777 41 $ 10,666,434 91 $5,715,291 55 $ 16,256,863 93 S 9,169,862 00 Income statement Ao 2011 Ao 2012 December 31 (figures in millions of pesos) ( ) ( ) TOTAL SALES domestic sales foreign sales foreign sales GROSS PROFIT Operational expenses Administration costs Sales expenses OPERATIONAL UTILITY Non operating income Non operational costs PROFIT BEFORE TAXES Income tax NET INCOME $1,602,470 00 $1,768,330 00 $ 1,566,460 00 $ 1,753,349 00 $ 36,010 00 $ 14,981 00 $ 797,920 00 $ 853,457 00 $ 804,550 00 $ 914,873 00 $ 516,848 00 $ 1,132,790 00 $ 167,778 00 $ 395,526 00 $ 349,070 00 $ 737,228 00 $ 287,702 00   $ 217,917 00 $ 1,096,996 08 $ 1,241,742 62 $ 787,420 00 $ 470,084 00 $ 597,278 08 $ 553,741 62 $ 227,304 08 $ 166,122 49 $ 369,974 00 $ 387,619 13 ( ) ( )

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A.- Within the expansionist policy of the company, it is planned to enter the Mexican market during the year 2017. For this, it is required

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