Senser Co. established a subsidiary in Russia two years ago. Under its original plans, Senser intended to operate the subsidiary for a total of four years. However, it would like to reassess the situation, since exchange rate forecasts for the Russian ruble now indicate that it may depreciate from its current level of $.033 to $.028 next year and to $.025 in the following year. Senser could sell the subsidiary today for 5 million rubles to a potential acquirer. If Senser continues to operate the subsidiary, it will generate cash flows of 3 million rubles next year and 4 million rubles in the following year. These cash flows would be remitted back to the parent in the U.S. The required rate of return of the project is 16 percent.

a. What is the net present value to Senser Co. from keeping the subsidiary?