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Target Corporation
Capital Budgeting Process and Project Selection
Type Your Name
10/31/2017

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This is case study analyzed five different projects Target Corporation had to decide on capital spent for
which project created the most value and the most growth for the company and its shareholders. By
analyzing the financial statements and exhibits of each project, the solution determines the positives
and negatives of each of these alternatives. The alternatives were Gopher Place, Whalen Court, The
Barn, Goldie’s Square, or Stadium Remodel. It shows how only NPV and IRR are not the only drivers for
project selection decision. It answers four specific questions as required by this case study. FOR ANY
OTHER QUESTIONS ON THISE CASE STUDY PLEASE SEND ME AN EMAIL.
This case solution answers the following questions as required….

1. Be prepared to describe and critique Target’s capital-budgeting system. Give specific

consideration to the role of the real-estate managers and the makeup of the CEC.

2. Which of the five CPRs should Doug Scovanner accept? Be prepared to explain how each
of the considerations that follow influenced your decision

3. Why does Target use different hurdle rates for the store and the credit cards (9% and
4%, respectively)? What process would you use to estimate these discount rates to see if they are
reasonable

4. As a member of the CEC, would you continue to approve CPRs if it meant that Target
would need to fund the requests with external funds, either debt or equity?