Assuming that Microsoft corporation is contemplating establishing a wholly-owned subsidiary operation in the Mediterranean. Two countries under consideration are Spain and Cyprus. Sigma intends to repatriate all after-tax foreign-source income to the United States. In the United States, corporate income is taxed at 35 percent. In Cyprus, the marginal corporate tax rate is 30 percent; however, in Spain corporate income is taxed at 15 percent. The withholding tax treaty rates with the United States on dividend income paid is 5 percent from Cyprus and 10 percent from Spain. The CEO has asked you to help her determine where to locate the new subsidiary. The location decision of Cyprus or Spain will be based on which country has the smaller total tax liability.