A project in South Korea requires an initial investment of 1 billion South Korean won. The project is expected to generate net cash flows to the subsidiary of 2 billion and 2 billion won in the two years of operation, respectively. The project has no salvage value. The current value of the won is 1,150 won per U.S. dollar, and the value of the won is expected to remain constant over the next two years.

a) What is the NPV of this project if the required rate of return is 14 percent? Do not round intermediate calculations. Round your answer to the nearest dollar.

New NPV = ___

b) A situation where the funds are blocked and the won is expected to depreciate ___ (increases, reduces) the NPV by $___