Offshore Solutions, Inc., is considering taking advantage of the new Tax Cut and Jobs Act provisions to slash its taxes by moving its production, sales facilities, and jobs offshore to the country of Lowtaxistan. Offshore is considering a 3-year project in which the cash flows will be in the local currency, the lax (LAX). The spot direct exchange rate is LAX/USD = Spot = 1.6000. Lowtaxistan is experiencing quite a bit of inflation and its central bank's risk-free bonds for maturities 3 years or less all have a nominal annual yield of 15% compared to the U.S. risk-free rate of 4% for the same maturities. The project cash flows (in millions of lax) are expected to be:
Year 0 1 2 3
-2,000 1,200 700 1,500
What is the dollar NPV (in $millions) of the project if your dollar-denominated cost of capital is 10%?