Can someone please read my executive summary and tell me if it makes sense. If it does not can someone please help me make it read well. Thanks for your help.

PDF Create Adobe PDF Create and Share Purpose of Report Send For Review Comments Review And Comment and Run Action Create and Run Action Media Media McCormick & Company is expanding their business with a new location and equipment Largo, Maryland. The new factory would allow the company to increase its overall production capacity. McCormick & Company's initial investment for the new plant and equipment will cost $350M. The investment will depreciate as a modified accelerated (MACRS) seven-year class asset and the new plant will be built on some of the company's land which has an after-tax market value of $14M. Before committing to the new project, McCormick & Company would like to identify areas of improvement in their financial structure. They are also interested in applying best industry practices in future business decisions. The purpose of this report is to: Use capital budgeting to better understand the financial implications of developing capital structure Assist McCormick & Company in selecting the best financing option Understand how McCormick & Company's anticipated growth, debt, market return, and marginal tax rate will affect their bottom line they choose to pursue opening the new factory Provide analysis and make recommendations supporting McCormick's new business decisions and assist them in making profitable future financial decisions. Methods Complete a thorough evaluation of McCormick & Company's business finances and operations. Determine information about weight of equity and debt, cost of equity and debt. And weighted average of cost of capital (WACC). Review McCormick's & Company's capital in preparation for constructing the capital. Evaluate McCormick & Company's risk and returns regarding investing in an additional factory. Findings and Conclusions + TOO 892 words 9:23 PM Type here to search 100% AR Create and Share Review And Comment Create and Run Action Media Findings and Conclusions McCormick & Company decided to pursue the 20-year bond for $350 million dollars. The new plant will be built on some of the company's land, which has a current, after-tax market value of $14 million. The company will need to finance some of the cash to fund $17 million in receivables and $14 million in Inventory starting at year zero. Yahoo finance reports Beta of 0.01 and cost of equity at 9% and expected future dividend of $2.38 and a growth rate of 7%. The $17 million for receivables and the $14 million for Inventory are cash outflows. Calculating the Net Present Value (NPV) and the Internal Rate of Return (IRR) gives McCormick & Company a better understanding of how their anticipated growth, debt, return, and marginal tax rate will affect their bottom line and future profits (UMUC, 2019). The company expects vendors to give free credit on purchases of $15 million (accounts Payable). The $15 million for receivables is a cash inflow. An acquisition was completed for Reckitt Benckiser's Food Division (RB Foods) from Reckitt Benckiser Group LLC. The purchase price was approximately $4.2 billion, net of acquired cash the acquisition was funded through our issuance of approximately 6.35 million shares of common stock. The RB Foods acquisition resulted in acquisitions contributing more than one-third of sales growth in 2017 and is expected to result in acquisitions contributing more than one-third of our sales growth in 2018. The calculated Weighted Average Cost of Capital (WACC) for McCormick and Company is 4.56%. I recommend McCormick should change its discount rate from 7% to 9% as market situation changed too much and low discount rate shows higher enterprise value of company which is good for the company but not for investors and stakeholders. McCormick & Company should investigate tax or other incentives that Maryland provides to new businesses to help their overall returns. Understanding capital budgeting helps businesses to see into the future and determine the profitability of a long-term investment. It is used ultimately to weigh the merits of a proposed capital investment and helps to narrow down which of the many investment opportunities will be fruitful for the company. It also helps companies develop long term strategic business goals and provides budgeting and expenditure control for projects that have been accepted. Capital budgeting can also provide a business hard numbers used to determine risks and potential returns, making sure that money that is spent is making money for the company. The CFO thinks that the likely NPV will be close to $350,000,000.00 McCormick should not accept this project because the NPV is negative -587.23 with an IRR of 9%. With the indication of the NPV negative, the company has a huge chance of losing more money than they intended. After all, making poor investment decisions can have a devastating effect on a company (Thomas, 2018). Recommendations Canital hudoeting and an ideal capital structure will support McCormick & Comnanv in making the best decisions when weighing the financing ontions available to them to Focus E- 192 wordsID 924 PM 10026 ^ - O Type here to search 12/13/2019 Recommendations Capital budgeting and an ideal capital structure will support McCormick & Company in making the best decisions when weighing the financing options available to them to purchase the new factory We recommend that any company considering new investments ventures to understand their risk tolerance and develop investment goals and estimate returns when considering future financial decisions The first financing option is the best for McCormick & Company where the NPV is $350M and the IRR is 9% Capital structure is crucial for an ideal mix of debt and equity which can be used to expand McCormick & Company which will increase revenues and profits McCormick & Company must take into consideration the WACC, TVM, NPV, taxes, cost of capital, risk, and constraints for the purchase of the new factory, Focus 892 words O - - 925 PM 00 12/13/2019 Ble 6 Type here to search L P e 100% o ^. 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