Question $2(1$ point$)$

Gavin Mills has an existing facility that it paid $23,000,000$ for $10$ years ago. It has $3$ choices for this facility now: sell it outright for $9\mathrm{.}5M$ today, lease it for the next $4$ to produce flax seed for $4$ years, then sell it at the end of the last year of production for $6$M$,$ but it will have to be upgraded $($today$)$ for use at a cost of $1\mathrm{.}5$M $($not paid under the lease option$).$ If it is used by Gavin to produce flax seed it can be sold for $$42$ a bushel with a contribution margin ratio $($how much the firm keeps after variable costs of production$)$ of $25\%.$ To operate the plant, Gavin will incur $$200,000$ per year of fixed costs, regardless of production levels $($not applicable to the lease$).$ Gavin forecasts that it will sell the following bushels in each of the next $4$ years: $200,000,300,000,400,000,100,000.$ The lease terms would be $$2M$ per year plus a $$200,000$ per year reduction in costs for the supplies Gavin buys from the leasee. Please use a WACC of $12\%.$

What is the present value for the lease choice? Please enter your response in millions with no units or commas and $2$ decimal places: $"$ $$1,100,000"$ would be $"1\mathrm{.}10"($note: NO $"$M$"$ and

use $5/4$ rounding$).$

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