MJW Corporation (US) is a manufacturer of electronics. During the last five years, the cost of raw materials and labor, have continued to rise in the firm's US manufacturing facility. As a result, the CEO of MJW Corp. is considering establishing a new manufacturing subsidiary overseas to take advantage of lower production costs elsewhere. Investment advisors to the CEO have suggested Mexico and Thailand as two possible locations.
Below is the summary of the subsidiary's expected pre-tax cash flows for the first five years in each location. Even though most operating cash flows will be in pesos or bahts, the company anticipates some US dollar denominated expenses.

ETC Mexico

In Millions??2012??2013??2014??2015??2016
MP cash inflows???7500??11000??12500??13800
MP cash outflows?18000??1500?? 1900?? 1700?? 1600
US $ cash outflows???? 200?? 150?? 125?? 75

ETC Thailand

In Millions??2012??2013??2014??2015??2016
TB cash inflows????28000??24500??26000??28800
TB cash outflows?60000?? 2000?? 2200?? 1900?? 3000
US $ cash outflows??? 125?? 175?? 200?? none


Additional Information:
Exchange rates for 2012 are:?1 Mexican Peso(MP)=US$.08 (i.e $1=12.5 MP)
1 Thai baht (TB)= US$.032 (or $1=31.25TB).
It is expected that the Mexican Peso will strengthen against the US dollar at 4 percent per year. and the Thai baht will weaken at the rate of 3 percent per year against the dollar. MJW Corporation's weighted average cost of capital for both projects is 6 percent. Mexican income tax rates are 15%, whereas income tax rates in Thailand are 10%. No monies will be repatriated back to the US.

. Determine the net present value of both projects. Round PV factor to 4 decimal places.
. If you were MJW Corporation's investment advisor, which location would you choose for the new subsidiary? Why?