can someone please read my executive summary and tell me if it makes sense. should I add anything or take anything out? Thanks for your help.

Envelopes Labels Start Mail Select MergeRecipients Edit Recipient List Highlight Address Greeting Insert Merge Merge Fields Block Line Field Match Fields Update Labels ABC Preview Results Find Recipient Check for Errors Preview Results Finish & Merge Finish Merge to Adobe PDF Create Start Mail Merge Write & Insert Fields 1 Purpose of Report McCormick & Company is expanding their business with a new location and equipment in 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 cost of capital to help investors determine good/bad investment opportunities with McCormick & Company Use capital budgeting to better understand the financial implications of developing capital structure Methods Access McCormick & Company's Cash intlow/Cash outflow with Microsoft Excel Workbook document Calculate McCormick & Company's NPV (Net Present Value) Calculate McCormick & Company's IRR (Internal rate of retum) Findings and Conclusions McCormick & Company borrowed $350 million dollars with an IRR of 18.26% for a new plant that 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 find S17 million in receivables and S14 million in Inventory starting at year zero. With a cost of equity at 9% and an expected future dividend of $2.38 and a growth rate of 7% McCormick & Company projects profits for the company's future. The $17 million for receivables and the S14 million for Inventory are cash outflows. The company expects andare to is free crartit n wrescas of 15 million facroute Drohia Tha 1 million for rachlaic arch inte 602 words D Focus E- 9:57 PM O Type here to search 100% n a 12/17/2019 + 901 Preview Find Recipient Create Acrobat Mangs Review ViewH elp Acrobat Share Comments Rules D DI ABC Envelopes Labels Match Fields Start Mail Select Edit Highlight Address Greeting Insert Merge Finish & Merge to Merge Recipients Recipient Unt Merge Fields Block Line Field Update Labels Results Check for Error Mergo Adobe PDF Start Mail Merge Write insert Fields Preview Results Finish vendors to give free credit on purchases of S15 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 10.70%. 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. If McCormick & Company has not researched tax or other incentives that Maryland provides to new businesses to help their overall returns, they should because they may be entitled to benefits such as new business loans with a low APR, or new business tax breaks on the following years taxes as an example. 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. After all, making poor investment decisions can have a devastating effect on a company (Thomas, 2018). McCormick should accept this project Recommendations . Maintain NPV and IRR at its current rate due to profitability Keep operating expenses as low as possible by not overspending, creating and sticking to a budget Monitor tax laws that may go into effect especially after purchasing a portion of land that some of the business will be built on I References Thomas, J. (2018. November 2). What is capital budgeting and why is it important. Retrieved from https://bizuet.com/info 879362.4.capital budgeting important.html Focus 3 - 682 words 9:57 PM O Type here to search te L e w 100% ^