A6. A project is worth $15 million today without an abandonment option. Suppose the value of the project is $20 million one year from today with high demand (70% chance) and $10 million with low demand. It is possible to sell off the project for $12 million if the demand is low. Assuming a discount rate of 10%, which of the following is the value of the abandonment option (to the nearest $000)?

(a) $455,000.

(b) $545,000.

(c) $727,000.

(d) $1 million.

(e) None of the above.