I am in the process of replacing metal framed basement windows with new vinyl flangeless windows.  The openings are cut out of the top of the foundation wall, so that the sides and bottom are 8x8x16in concrete block, and the top is formed by the sill plate (vinyl siding terminates at bottom of sill plate on exterior).  Based on recommendations I have seen in other threads on here, I plan to build a window buck comprised of 1×4″ PT wood separated from the concrete by a layer rigid foam. I also plan to insulate the interior with rigid eps followed by 2×4 framing and drywall.

My question is: at what depth should I install the window? Should the window be placed on the outer edge of the block, middle, or inner edge?  I was originally planning to install the window centered in the block, but now I am wondering if I should install to the outer edge. Either way, I plan to return the interior rigid foam along the inside edge of the opening, up to the window frame.