Company XYZ is considering an international investment project in a region with a history of political instability. The project is expected to generate annual cash flows of $1,000,000 for the next five years. Without considering political risk, the company's cost of capital is 8%. However, due to the perceived political risk, Company XYZ anticipates a 25% chance of a 15% reduction in cash flows in any given year. 

Calculate the Net Present Value (NPV) of the investment project both before and after incorporating political risk by adjusting the expected cash flows. Show your calculations for both scenarios.

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