You own a small manufacturing plant that currently generates revenues of $2 million per year. Next year, based upon a decision on a long-term government contract, your revenues will either increase by 20% or decrease by 25%, with equal probability, and stay at that level as long as you operate the plant. Other costs run $1.6 million dollars per year. Assume that you can shut down the plant at no cost at any time and your cost of capital is 10%.

The value of the option to abandon production will be closest to:

	A.	$1.0 million
	B.	$0.5 million
	C.	-$1.0 million
	D.	$3.0 million
	E.	None of the above