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Pinder Co . , Ltd . is considering building a solar power plant. The solar power plant will cost $ 1 0 million and will

Pinder Co., Ltd. is considering building a solar power plant. The solar power plant will cost $10 million and will take one year to build. If the demand for electricity is large, solar power stations will permanently generate $4.8 million a year. If the demand for electricity is low, solar power plants will always generate $150,000 a year. The probability of high demand is 62%, and the probability of low demand is 38%. In order to encourage solar power generation, the government has provided an offer for enterprises, that is, two years after the completion of the solar power station, it will sell its solar power station to the government at a 10% discount. In other words, if the cost of building a solar power plant is $1, the government will propose to buy it for $0.9. There is no other choice but to sell it to the government. The required rate of return of Pinder Co., Ltd. is 10%. Assume that the cash flow occurs at the end of each year, except for the initial cash flow. According to the above information, what is the value of the option to sell the solar power plant to the government by the decision tree? ( Round to two decimal places)

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