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You also have a second potential project, with a different real option. The project will have an initial cost of $52 million, which must be

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You also have a second potential project, with a different real option. The project will have an initial cost of $52 million, which must be paid at the time of investment. You realize that the project has three possible cash flows starting in year 1 and continuing forever. First, there is a 15% chance of earning $1.29 million per year starting in year 1 . Second, there is a 26% chance of earning $4.76 million per year starting in year 1 . Third, there is a chance the the project will earn $2.14 million per year. These are the only three possibilities. In 2 year(s), you will be able to abandon the project and sell off the assets for $37.5 million, but will give up the cash flows starting one year after you abandon (if you abandon in year 1 , you receive the year 1CFs but no CFs after that; if you abandon in year 2, you receive the year 1 and year 2 CFs, but no CFs after that, and so on.). The risk-free rate and appropriate discount rate for the project is 5%. What is the value today of this option to abandon? Input your answer in millions of dollars, rounded to the nearest 0.001 (e.g. $19.056.129 would be entered as 19.056)

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