Gasworks, Inc., has been approached to sell up to 3.8 million gallons of gasoline in three months at a price of $3.10 per gallon. Gasoline is currently selling on the wholesale market at $2.90 per gallon and has a standard deviation of 59 percent.

If the risk-free rate is 6 percent per year, what is the value of this option? Use the two-state model to value the real option.