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 flows 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 tower, 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 tax will be Imposed, in which case the yearly cash flows will be only $2.2 million. At the same time, there is a 50% chance that the tax 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 tax 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 8%. Do not round Intermediate calculations, Enter your answer in millions. For example, an answer of $1.234 million 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 problem. $ million