Finisterra, S A Finisterra, S A , located in the state of Baja California, Mexico, manufactures frozen Mexican food, which enjoys a large following in the U S states of California and Arizona to the north In order to be closer to its U S market, Finisterra is considering moving some of its manufacturing operations to southern California Operations in California would begin in year 1 and have the following attributes Assumptions Value Sales price per unit, year 1 (US$) $5 00 Sales price increase, per year 3 00 Initial sales volume, year 1, units 1,000,000 Sales volume increase, per year 10 00 Production costs per unit, year 1 $ 4 00 Production cost per unit increase, per year 4 00 General and administrative expenses, per year $100,000 Depreciation expenses, per year $ 80,000 Finisterras WACC (pesos) 16 00 Terminal value discount rate 20 00 Spot exchange rate (Ps $) Year 0 8 00 Spot exchange rate (Ps $) Year 1 9 00 Spot exchange rate (Ps $) Year 2 10 00 Spot exchange rate (Ps $) Year 3 11 00 The operations in California will pay 80 of their accounting profit to Finisterra as an annual cash dividend Mexican taxes are calculated on grossed up dividends from foreign countries, with a credit for host country taxes already paid What is the maximum U S dollar price Finisterra should offer in year 1 for the investment

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Finisterra, S.A. Finisterra, S.A., located in the state of Baja California, Mexico, manufactures frozen Mexican food, which enjoys a large following in the U.S. states

Finisterra, S.A. Finisterra, S.A., located in the state of Baja California, Mexico, manufactures frozen Mexican food, which enjoys a large following in the U.S. states of California and Arizona to the north. In order to be closer to its U.S. market, Finisterra is considering moving some of its manufacturing operations to southern California. Operations in California would begin in year 1 and have the following attributes

Assumptions	Value
Sales price per unit, year 1 (US$)	$5.00
Sales price increase, per year	3.00%
Initial sales volume, year 1, units	1,000,000
Sales volume increase, per year	10.00%
Production costs per unit, year 1	$ 4.00
Production cost per unit increase, per year	4.00%
General and administrative expenses, per year	$100,000
Depreciation expenses, per year	$ 80,000
Finisterras WACC (pesos)	16.00%
Terminal value discount rate	20.00%
Spot exchange rate (Ps/$) Year 0	8.00
Spot exchange rate (Ps/$) Year 1	9.00
Spot exchange rate (Ps/$) Year 2	10.00
Spot exchange rate (Ps/$) Year 3	11.00

The operations in California will pay 80% of their accounting profit to Finisterra as an annual cash dividend. Mexican taxes are calculated on grossed-up dividends from foreign countries, with a credit for host-country taxes already paid. What is the maximum U.S. dollar price Finisterra should offer in year 1 for the investment?