Pinder Ltd is considering buying the patent rights to a recently developed drug to treat eczema for $30.0 million. There is only 2 years left on the life of the patent, after which Pinder Ltd would not be able to compete with generic drug manufacturers. In order to produce the drug, Pinder Ltd would need to spend $9.7 million each year to use production facilities owned by other firms, and each pill would cost Pinder Ltd $0.20 to make. Because Pinder Ltd will borrow existing production facilities from other firms, it can choose whether to produce the drug each year. Pinder Ltd is able to gauge demand for the drug at the start of each year. If there is high demand, Pinder Ltd will be able to sell 10 million pills during the year and if there is low demand, Pinder Ltd will be able to sell 0.5 million pills during the year. In any year, if there is high demand for the drug, there will always continue to be high demand for drug during the remaining life of the patent. In any year, if there is low demand for the drug, the following year can have high demand or low demand. The probability that there will be high demand is 42% and the probability that there will be low demand is 58%. Due to government regulation, the price of the drug is fixed at $5.1 per pill, regardless of demand. The required rate of return for Pinder Ltd is 10%. Assume cash flows occur at the end of each year, except for initial cash flows. Based only on the information above, what is the present value of the option to delay production of the drug, using the decision-tree method? (round to the nearest two decimal places)

a)$5.41 million

b) $5.84 million

c) $5.23 million

d) $5.59 million

e) None of the other answers.