The Karns Oil Company is deciding whether to drill for oll on a tract of land that the company owns. The company estimates the project would cost $8 million endar. karns entimater that, once drited, the oft witt generate positive net cash flows of $4 million a year at the end of each of the next 4 years. Although the company is fairly confldent about its cash fow forecast, in 2 vears 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 59 million, Moreover, if it waits 2 years, then there is a 90%6 chance that the net cash flows would be $4.2 mition a year for 4 years and a 10% chance that they would be $2.2 mallion a year for 4 vears. Assume all cash flows are discounted at 10%. Use the Eisck. Scholes modet to estimate the value of the option. Assume the variance of the project's rate of return is 0.512 and that the risk-free rate is 7%. Do not round intermediate calculations. Enter vour answer in millions. For example, an answer of $1.234 million should be entered as 1.234 , not 1,234,000, Rund your answer to three decimat places