1. A project is worth $12 million today without an abandonment options. Suppose the value of the project is $18 million one year from today with high demand and $8 million with low demand. It is possible to sell off the project for $10 million if the demand is low. Calculate the value of the abandonment option if the discount rate is 5% per year. 

• $1.03 million
• $2 million
• $1.9 million