Question $3$

You also have a second potential project, with a different real option. The project will have an initial cost of $\backslash (\backslash$$ $52\backslash )$ million, which must be paid at the time of investment. You realize that the project has three possible cash flows starting in year $1$ and continuing forever. First, there is a $\backslash (14\backslash \%\backslash )$ chance of earning $\backslash (\backslash$$ $1\mathrm{.}49\backslash )$ million per year starting in year $1.$ Second, there is a $\backslash (49\backslash \%\backslash )$ chance of earning $\backslash (\backslash$$ $6\mathrm{.}97\backslash )$ million per year starting in year $1.$ Third, there is a chance the the project will earn $\backslash (\backslash$$ $3\mathrm{.}07\backslash )$ million per year. These are the only three possibilities. In $3$ year$($s$),$ you will be able to abandon the project and sell off the assets for $\backslash (\backslash$$ $37\mathrm{.}5\backslash )$ million, but will give up the cash flows starting one year after you abandon $($if you abandon in year $1,$ you receive the year $1$ CFs but no CFs after that; if you abandon in year $2,$ you receive the year $1$ and year $2$ CFs$,$ but no CFs after that, and so on$.).$ The risk$-$free rate and appropriate discount rate for the project is $\backslash (5\backslash \%\backslash ).$ What is the value today of this option to abandon? Input your answer in millions of dollars, rounded to the nearest $0\mathrm{.}001($e$.$g:$,\backslash (\backslash$$ $19,056,129\backslash )$ would be entered as $19\mathrm{.}056).$