A company is contracted to build an asset for a customer. The contract price is £5m but the contract stipulates that the company will receive an incentive payment of a further £1m if the asset is completed by the end of 2018. However, the company will incur a penalty of £1m if the asset is not completed by the end of June 2019.

The company estimates that the probability of completing the asset by the end of 2018 is 25% and the probability of not completing the asset by the end of June 2019 is 5%.

Determine the transaction price for this contract.