You own a wholesale plumbing supply store. The store currently generates revenues of

$ 1.01$1.01

million per year. Next year, revenues will either decrease by

9.5 %9.5%

or increase by

5.5 %5.5%,

with equal probability, and then stay at that level as long as you operate the store. You own the store outright. Other costs run

$ 870 comma 000$870,000

per year. There are no costs to shutting down; in that case you can always sell the store for

$ 510 comma 000$510,000.

What is the business worth today if the cost of capital is fixed at

9.5 % question mark9.5%?

(Hint:

Make sure to round all intermediate calculations to at least four decimal

places.)