5) 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 expects to receive 5 million USD if it gets expropriated in either year and will not receive any cash flows subsequent to the year of expropriation. 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: $9.69 million