A firm has rented a machine which costs $1,000,000 per year, paid at the beginning of the year. The machine is solely used in manufacturing a specific product and has the potential to result in a cash inflow of $2,000,000 per year. Each year, there is a 25% chance that no demand for the product will exist, and a 75% chance that unlimited demand for the product will exist. However, the market for this product will cease to exist after two years. After one year, the firm can choose to rent an upgraded machine for an additional $500,000 which would double the cash inflow from production. The annual effective interest rate is 8%. Calculate the value of the option to rent this upgraded machine.