Assume that Baps Corp. is considering the establishment of a subsidiary in Norway. The initial investment required by the parent is $5 million. If the project is undertaken, Baps would terminate the project after four years. Baps's cost of capital is 13 percent, and the project has the same risk as Baps's existing projects. All cash flows generated from the project will be remitted to the parent at the end of each year. Listed below are the estimated cash flows the Norwegian subsidiary will generate over the project's lifetime in Norwegian kroner (NOK):

	Year 1	Year 2	Year 3	Year 4
Cash Flow	NOK 10,000,000	NOK 15,000,000	NOK 17,000,000	NOK 20,000,000
FX forecast	$0.13	$0.14	$0.12	$0.15

The current exchange rate of the Norwegian kroner is $.135.

Refer to chart above to calculate the net present value of the Norwegian project & choose the correct option below

1. -$803,848

2. $5,803,848

3. $1,048,829

4. None of these are correct.