The Karns Oil Company is deciding whether to dril for oil on a tract of fand that the company owns. The company estimates the project would cost 38 million todoy. Karns entimates that, once deilled, the off will generato positive net cash flowis of $4 mittion a year at the end of each of the next 4 years. Ahthough the company is fairly confident about its cash flow forecast, in 2 years it will have more information about the local geology and about the price of oil. Karns estimates that if it waits 2 years then the project would cost $9 million. Moreover, if it waits 2 years, then there is a 90% chance that the net cash flows would be $4.2 milion a year for 4 years and a 10% chance that they would be $2.2 malion a year for 4 years: Assume all cash flows are discounted at 10\%. Use the Black-Scholes model to estimate the value of the option. Assume the variance of the project's rate of return is 0.632 and that the enskfree rate is 5%. Do not round intermediate calculations. Enter your answer in milions. For example, an answer of 51.234 milion should be entered as 1.234, not 1,234,000. Round your answer to three decimal places. s. milion