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 9.9%or increase by 4.6%, 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 $540,000.

What is the business worth today if the cost of capital is fixed at 9.8%?

(Hint: Make sure to round all intermediate calculations to at least four decimal places.)