Brewster is planning to buy a Whale Watching Tour company Big Fish (BF) in Tofino. BF operates charter boat tours in Pacific Rim National Park. Estimate the selling price of BF using the Free Cash Flow Method. Assume Cost of Capital for Brewster is 12%. Brewster estimates that after 20 years, they can sell the remaining assets in BF for $7,000,000. (8 marks)

Free Cash Flow per Year

Year 1 - 6 $ 3,000,000

Year 7 - 12 3,200,000

Year 13 - 20 3,800,000

Terminal Value 7,000,000