Lakonishok Equipment has an investment opportunity in Europe. The project costs $12$

million and is expected to produce cash flows of $2$ million in Year $1,2\mathrm{.}4$ million in Year

$2,$ and $3\mathrm{.}5$ million in Year $3.$ The current spot exchange rate is $1\mathrm{.}35\frac{}{\text{\$}}$ and the current

risk$-$free rate in the United States is $2\mathrm{.}8$ percent, compared to that in Europe of $2$

percent. The appropriate discount rate for the project is estimated to be $14$ percent, the

U$.$S$.$ cost of capital for the company. In addition, the subsidiary can be sold at the end of

three years for an estimated $9$ million. Use the exact form of interest rate parity in

calculating the expected spot rates. What is the NPV of the project in U$.$S$.$ dollars? $($Do

not round intermediate calculations and enter your answer in dollars, not in millions,

rounded to two decimal places, e$.$g$.,1,234,567\mathrm{.}89)$

NPV