Maxim Technologies is considering a $20 million investment in a new plant to
produce digital thermometers. Maxim expects the present value of the project's
future cash flows to be $10 million in five years' time, if it is unsuccessful.
However, if the project is successful, Maxim expects the present value of its
future cash flows to be $40 million in five years' time. In that case, Maxim will be
able to increase the present value of the project by $25 million, by investing an
additional $10 million in the expansion of the plant. What is the value of the
option to expand the plant, given that the risk-free interest rate is 5% p.a.?