Kim Hotels is interested in developing a new hotel in Seoul. The comparty estimates that the hotel would require an initial investment of $20 milion. Kim expects the hotel will produce potitive cash fows of $3 mittion a vest ot the end of esch of the hext 20 years, The profect's cost of capitat is 13%. Kim expects the casb 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 kerean povernment 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 wil be imposed, in which case the yeariy cash flows will be only $2.2 mililion. At the same time, there is a 50% chance that the tax will not be imposed, in which case the yearty cash flows witt be $3.8 million. Kim is deciding whether to proceed with the hotel todsy or to wait a vear to find out whether the tax will be imposed. If Kim waits a veac, the initiat investment will remain at $20 mallion. Assume that all cash flows are discounted at 13%6. Use the Black- 5choles model to estimate the value of the option. Assume that the variance of the project's rate of return is 0.0732 and that the risk-free rate is 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 sotware packages, such as Minitab or Excel, to solve this problem. s. milition