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A project is worth $12 million today without an abandonment option. Suppose the value of the project next year depends on the demand: it is

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A project is worth $12 million today without an abandonment option. Suppose the value of the project next year depends on the demand: it is $18 million with high demand and $8 million with low demand. It is possible to sell off the project for $10 million if the demand is low. The risk-free rate is 5% per year. Calculate the value of the abandonment option

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