As McCormick decides whether they will invest in an additional factory to keep up with demand, the company remains uncertain if the investment will yield worthwhile returns. “That is where they need us to provide them with a risk and return evaluation,” Frank says. “Risk is the financial liability a company takes in a given investment in consideration of a potential return on the investment.”
Frank has asked you to meet with your colleagues and discuss how risk and returns will influence McCormick’s investment decision. Discuss whether McCormick & Company should invest in a new factory in Largo, Maryland. Give credit to any sources you use to support your statements. Discuss how understanding risk and returns will impact this decision. Give credit to any sources you use to support your statements. Later in the week, after you are back in your office, you have a follow-up discussion with your MCS colleagues in an effort to summarize the key lessons from your discussion on risk and returns at the meeting. Respond to your colleagues’ original discussion posts and give credit to any sources you use to support your statements.