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21. Drew Brees, Michael Thomas and Alvin Kamara are considering investing a brewpub very close to the Superdome in New Orleans. The sellers are asking
21. Drew Brees, Michael Thomas and Alvin Kamara are considering investing a brewpub very close to the Superdome in New Orleans. The sellers are asking for $25,000,000 to acquire 100% ownership of the brewpub. Drew, Michael and Alvin estimate the annual after-tax free cash flow from the brewpub to be as follows: $6,000,000 for each of the next 3 years. $3,000,000 for each of the following 3 years $1,000,000 per year, forever, following the first 6 years Their required return for this investment is 10%. Should Drew, Michael and Alvin make this investment? Why or why not? (12 points)
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