18.5 What is the net present value and internal rate of return on this investment Doohicky Devices. Doohicky Devices, Inc., manufactures design components for personal computers. Until the present, manufacturing has been subcontracted to other companies, but for reasons of quality control Doohicky has decided to manufacture itself in Asia. Analysis has narrowed the choice to two possibilities, Penang, Malaysia, and Manila, the Philippines. At the moment only the summary of expected, after-tax, cash flows displayed at the bottom of this page is available. Although most operating outflows would be in Malaysian ringgit or Philippine pesos, some additional U.S. dollar cash outflows would be necessary, as shown in the table at the top of the next page. The Malaysia ringgit currently trades at RM3.80/$ and the Philippine peso trades at Ps50.00/$. Doohicky expects the Malaysian ringgit to appreciate 2.0% per year against the dollar, and the Philippine peso to depreciate 5.0% per year against the dollar. If the weighted average cost of capital for Doohicky Devices is 14.0%, which project looks most promising? Problem 18.5 Doohicky in Penang (after-tax) 2012 2013 2014 2015 2016 2017 Net ringgit cash flows (26,000) 8,000 6,800 7,400 9,200 10,000 Dollar cash outflows (100) (120) (150) (150) Doohicky in Manila (after-tax) Net peso cash flows (560,000) 190,000 180,000 200,000 210,000 200,000 Dollar cash outflows (100) (200) (300) (400)