Widgets International's British factory cost100 million, which is also the market value of the pound debt financing it. WI is expecting net pound revenues of15 million per year foreverfrom British sales of widgets, not counting year 0. It forecasts the future $/ exchange rate as equal to the current spot rate, which is currently 2 $/. WI's dollar discount rate is 12% per year.

a) What is the npv of WI's British subsidiary?

b) How would it change if the pound depreciated 20% to 1.60 $/? Remember to take into account the depreciation's impact on the dollar value of the pound debt.