Rework Problem 24-1 using the Black-Scholes model to estimate the value of the option. Assume the risk-free rate is 8%.

Data from Problem 24-1:

Kim Hotels is interested in developing a new hotel in Seoul. The company estimates that the hotel would require an initial investment of $20 million. Kim expects that the hotel will produce positive cash flows of $3 million a year at the end of each of the next 20 years. The project's cost of capital is 13%.