1. How does Target’s business model compare with Wal-Mart’s and Costco’s?

2. What is Target’s capital-budgeting process? Is it consistent with the company’s business and financial objectives?

3. Explain what the dashboards tell you as a manager. Isn’t the NPV enough information for you to make a go/no-go decision?

4. Which of the five CPRs did you accept? Which project attributes did you consider as part of your decision?

This case puts students in the role of Target Corporation’s CFO, Doug Scovanner, as he considers the pros and cons of a variety of capital-investment proposals. Scovanner is preparing his thoughts prior to the November 2006 meeting of the Capital Expenditure Committee (CEC). During that meeting he will join other Target senior executives, including the CEO, to consider the merits of ten capital-project requests (CPR), five of which are expected to require extra attention from the committee members. Each CPR is presented to the committee with a “dashboard” that summarizes the critical inputs used to compute the net present value (NPV) and internal rate of return (IRR). The dashboards also contain data about the type of investment (new store or remodel), market size, location, customer-demographic information, as well as the sensitivity of NPV and IRR to changes in various inputs. In addition to the factors influencing the economics of the CPRs, Scovanner cites such issues as brand awareness and the corporate goal of 100 new stores per year as considerations for accepting or rejecting the projects. Thus, the CEC is tasked with balancing corporate strategy with investment opportunities and profitability.