please dont use excel, i will upvote!

7. Real Options Wet for the Summer, Inc., manufactures filters for swimming pools. The company is

deciding whether to implement a new technology in its pool filters. One year from now, the company will know

whether the new technology is accepted in the market. If the demand for the new filters is high, the present value

of the cash flows in one year will be $17.8 million. Ifthe demand is low, the value of the cash flows in one year

will be $9.4 million. The value of the project today under these assumptions is $14.3 million and the risk-free rate

is 6 percent. Suppose that, in one year, if the demand for the new technology is low, the company can sell the

technology for $11.8 million. What is the value of the option to abandon?