put (3) where you see (x)

Lorenzo Corporation is an Italian stationery equipment producer. So far, they exported to Asian countries. But, the company is not satisfied with the profit levels. Therefore, they want to start manufacturing in Asia. After long discussions, they decreasedthe number ofoptionsto two, which are Malaysia and Philippines.The cash flows are in Malaysian ringgit (MYR) and Philippines peso (PHP), respectively and the cash outflows are in eurosfor the following years. The duration of the project is four years.

The Malaysian ringgit currently trades at MYR4.92/ and the Philippines peso trades at PHP58.52/. The expectation of the company is that the Malaysian ringgit will appreciate by x% per year against the euro. On the other hand, it expects the Philippines peso to depreciate by x% per year against the euro. If the WACC (discount rate) of Lorenzo is 2x%, which project would you prefer to invest in? Expected cash flows in Malaysian ringgitsand Philippines pesos are given respectively, in addition to expected cash outflows in Eurosfor the following years

0 3 2020 -300000 1 2021 100000 2 2022 120000 2023 140000 4 2024 160000 Lorenzo in Malaysia Net MYR cash flows Euro cash outflows 0 -200 -300 -400 -500 0 2 2020 -800000 1 2021 500000 2022 600000 3 2023 700000 4 2024 800000 Lorenzo in Philippines Net PHP cash flows Euro cash outflows 0 -100 -200 -300 -400 0 3 2020 -300000 1 2021 100000 2 2022 120000 2023 140000 4 2024 160000 Lorenzo in Malaysia Net MYR cash flows Euro cash outflows 0 -200 -300 -400 -500 0 2 2020 -800000 1 2021 500000 2022 600000 3 2023 700000 4 2024 800000 Lorenzo in Philippines Net PHP cash flows Euro cash outflows 0 -100 -200 -300 -400