The managers of WTV p/c, a UK firm, are discussing whether or not to set up a foreign subsidiary in a South American country. The government of the country has recently changed and the country's new leaders have stated that they intend to introduce economic policies to improve balance of trade among them blockage of dividend remittances from the country. WTV pic expects to remit 180 million pesos per year to the UK if the government does not intervene. Blocked funds may be invested internally within the South American country but the government is likely to control interest rates. The investment in South American subsidiary has an expected NPV of 2 million. The peso is expected to devalue by approximately 10% per year relative to the pound. WTV uses a discount rate of 20% per year in appraisal of its South American investment. The current spot rate is 20 peso / . Required:- , Assuming that the government blocks the remittance of dividends for a period of three years, estimate the approximate interest rates that would have to exist in the South American country for the proposed investment to remain financially viable (ignore taxation). (17 Marks) The managers of WTV p/c, a UK firm, are discussing whether or not to set up a foreign subsidiary in a South American country. The government of the country has recently changed and the country's new leaders have stated that they intend to introduce economic policies to improve balance of trade among them blockage of dividend remittances from the country. WTV pic expects to remit 180 million pesos per year to the UK if the government does not intervene. Blocked funds may be invested internally within the South American country but the government is likely to control interest rates. The investment in South American subsidiary has an expected NPV of 2 million. The peso is expected to devalue by approximately 10% per year relative to the pound. WTV uses a discount rate of 20% per year in appraisal of its South American investment. The current spot rate is 20 peso / . Required:- , Assuming that the government blocks the remittance of dividends for a period of three years, estimate the approximate interest rates that would have to exist in the South American country for the proposed investment to remain financially viable (ignore taxation). (17 Marks)