This case represents the ranking and choosing of projects. It highlights the strictly quantitative valuation techniques of IRR and NPV. Too often, financial analysis may skew decisions or ignore market growth requirements. How does Target deal with this problem?

The November Meeting Of the 10 projects under consideration for the November CEC meeting, Doug Scov- anner recognized that five would be easily accepted, but that the remaining five CPRs were likely to be difficult choices for the committee. These projects included four new store openings (Gopher Place, Whalen Court, The Barn, and Goldie's Square) and one remodeling of an existing store into a SuperTarget format (Stadium Remodel). Exhibit 7 contains a summary of the five projects, and Exhibit 8 contains the CPR dashboards for the individual projects. As was normally the case, all five of the CPRs had positive NPVs, but Scovan- ner wondered if the projected NPVs were high enough to justify the required invest-ment, Further, with stiff competition from other large retailers looking to get footholds in major growth areas, how much consideration should be given to short-term versus long-term sales opportunities? For example, Whalen Court represented a massive investment with relatively uncertain sales returns. Should Scovanner take the stance that the CEC should worry less about Whalen Court's uncertain sales and focus more on the project as a means to increase Target's brand awareness in an area with dense foot traffic and high fashion appeal? Goldie's Square represented a more typical investment level of $24 million for a SuperTarget. The NPV, however, was small at $317,000, well below the expected NPV of a SuperTarget prototype, and would be negative without the value contribution of credit-card sales As CFO, Scovanner was also aware that Target shareholders had experienced a lackluster year in 2006 given that Target's stock price had remained essentially flat (Exhibit 9). Stock analysts were generally pleased with Target's stated growth policyand were looking for decisions from management regarding investments that were con- sistent with the company maintaining its growth trajectory. In that regard Scovanner recognized that each of the projects represented a growth opportunity for Target. The question, however, was whether capital was better spent on one project or another to create the most value and the most growth for Target shareholders. Thus, Scovanner felt that he needed to rank the five projects in order to be able to recommend which ones to keep and which ones to reject during the CEC meeting the next day