4) A U.S. firm is investing in a two-year foreign project and is concerned about political risk. It forecasts probabilities of expropriation of 20% in the first year and 5% in the second year. It does not expect to receive any cash flows if it gets expropriated. The firm decides to adjust for political risk only in the cash flows. The discount rate for this project is 10%. The firm' cash flows without considering political risk are: Taking into account political risk, what is the NPV of the project in USD? Ans: $6.93 million