Bloomington Pharmaceuticals is a U. S. corporation considering where to locate a new manu-facturing facility. The facility will require an investment of $ 50 million, and any profits during

the n- year investment horizon will be reinvested in the facility and will earn the same pretax return as the original investment. After n years the facility will be sold for an amount equal to the cumulative investment in the facility, that is, the original investment and all of the rein-vested earnings and profits. All the proceeds are repatriated to Bloomington Pharmaceuticals. Bloomington Pharmaceuticals has the possibilities narrowed down to three locations: Tucson, Arizona; Ireland; and Mexico. The pretax returns and local tax rates follow:

Tax Rate Pretax Return Tucson 35% 20% Ireland 10% 16% Mexico 20% 18% the n- year investment

a. Suppose that the investment horizon is 5 years ( n = 5). After paying any home- country tax due on repatriation, how much after- tax accumulation will Bloomington Pharmaceuticals have under each of the three location scenarios?