You own a wholesale plumbing supply store. The store currently generates revenues of $ 1.04 million per year. Next? year, revenues will either decrease by 9.8 % or increase by 5.1 %, with equal? probability, and then stay at that level as long as you operate the store. You own the store outright. Other costs run $890,000 per year. There are no costs to shutting? down; in that case you can always sell the store for $540,000. What is the business worth today if the cost of capital is fixed at 9.8 % ?
?(?Hint: Make sure to round all intermediate calculations to at least four decimal places.?)