Investment Timing Option: Option Analysis Kim Hotels is interested in developing a new hotel in Seoul, The company estimates that the hotel would require an initial investment of $20 million. Kim expects the hotel will produce positive cash fows of $3 million a year at the end of each of the next 20 years. The project's cost of capital is 13%. Kim expects the cash flows to be $3 million a year, but it recognizes that the cash flows could actually be much higher or lower, depending on whether the Korean government imposes a large hotel tax. One year from now, Kim will know whether the tax will be imposed. There is a 50% chance that the tox will be imposed, in which case the vearly cash flows will be only $2.2 million. At the same time, there is a 50% chance that the tox will not be imposed, in which case the yearly cash flows will be $3,8 million. Kim is deciding whether to proceed with the hotel today or to wait a year to find out whether the tox will be imposed. If Kim waits a year, the initial investment will remain at $20 million. Assume that all cash flows are discounted at 13%. Use the Black-Scholes model to estimate the value of the option. Assume that the variance of the project's rate of return is 0.0654 and that the risk-free rate is 7%. Do not round intermediate calculations, Enter your answer in milions, For example, an answer of $1.234 milion should be entered as 1.234 , not 1,234,000. Round your answer to three decimal places. Use computer software packages, such as Minitab or Excel, to solve this