This question is a variant of the Sport Hotel example that was presented in class, in the class notes, and in the Real Option chapter.

The change to consider is this: suppose that the value of the hotel is one of two values: $$9\mathrm{.}2$ million if the city is successful in obtaining the franchise $($and not $$8$ million as in the original problem$)$ or $$3\mathrm{.}3$ if the city is not successful in obtaining the franchise $($and not $$2$ million as in the original problem$).$

All other aspects of the problem are the same as originally presented, such as the costs per year. Assume that the probability of obtaining the franchise is $50\%.$ Incorporating these new hotel values from above, and the real option, what is the new NPV of the project?

$

million

Place your answer in millions of dollars using at least three decimal places. For example, the answer of nine hundred seventy five thousand would be entered as $0\mathrm{.}975$ and not as $975000.$