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.
Which of the five CPRs should Doug Scovanner accept? describe how each of the considerations that follow influenced your decision:
a. NPV and IRR
b. Size of the project
c. Cannibalization of other stores' sales
d. Store sensitivities
e. Variance to prototype
f. Customer demographics
g. Brand-awareness impact Why does Target use different hurdle rates for the store and the credit cards (9% and 4%, respectively)?
3. What process would you use to estim ate 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?