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Gasworks, Incorporated, has been approached to sell up to 4 . 6 million gallons of gasoline in three months at a price of $ 3

Gasworks, Incorporated, has been approached to sell up to 4.6 million gallons of gasoline in three months at a price of $3.70 per gallon. Gasoline is currently selling on the wholesale market at $3.40 per gallon and has a standard deviation of 63 percent. If the risk-free rate is 5 percent per year, what is the value of this option? Use the two-state model to value the real option. (Do not round intermediate calculations and enter your answer in dollars, not millions of dollars, rounded to 2 decimal places, e.g.,1,234,567.89.)

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