As part of the acquisition agreement, Kappa Corp. agrees to pay the former shareholders of Lambda Corp. $2 in cash for every dollar of gross revenues above $40,000,000 reported by Lambda at the end of the first year following acquisition. Kappa projects the following outcomes for the year:

Gross revenues	Probability
$35,000,000	0.10
$40,000,000	0.40
$45,000,000	0.30
$50,000,000	0.15
$55,000,000	0.05

Required: Using a 12 percent discount rate, what is the appropriate value to be reported as an earnings contingency liability on Kappa’s books at the date of acquisition?