Britto_Frank_Executive_Summary.docx - McCormick & Co....

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Executive SummaryCapital BudgetingMcCormick & Co.09/07/2020Purpose of ReportThe purpose of this report is to help McCormick & Company identify areas of improvement in theiroperations and explore options to make cost of capital decisions based on capital budgeting.MethodsWe used the process of capital budgeting, including the following variables, to conduct our analysis. Thecapital asset pricing model (CAPM) determines the required rate of return of an asset, taking into accountan asset’s sensitivity to non-diversifiable or systematic risk. (UMUC, n.d.). The weighted average cost ofcapital (WACC) is an assessment of the different required returns on a project. Ultimately, determiningthe profitability required to break even on the investment. (UMUC, n.d.). Market value ratios, orinvestment valuation ratios, correlate with a firm’s value as measured by stock price to other accounting
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Term
Spring
Professor
NoProfessor
Tags
Capital Asset Pricing Model, McCormick Company, Cost of Capital Decisions

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