You own a wholesale plumbing supply store. The store currently generates revenues of $ 1.03 million per year. Next year, revenues will either decrease by 10.4 % or increase by 4.8 %, with equal probability, and then stay at that level as long as you operate the store. You own the store outright. Other costs run $ 880,000 per year. There are no costs to shutting down; in that case you can always sell the store for $ 490,000. What is the business worth today if the cost of capital is fixed at 10.1 %?(Hint: Make sure to round all intermediate calculations to at least four decimal places.)

What is the business worth today if the cost of capital is fixed at 10.1 %?