Kenneth M. Eades
University of Virginia - Darden School of Business
Darden Case No. UVA-F-1563
This case puts students in the role of Target Corporation’s CFO as he considers the pros and cons of a variety of capital-investment proposals. The CFO is preparing his thoughts prior to a meeting of the Capital Expenditure Committee (CEC) with other Target senior executives to consider the merits of ten capital-project requests (CPR), five of which were expected to require extra attention. Each CPR has a "dashboard" that summarizes the critical inputs used to compute the net present value (NPV) and internal rate of return (IRR) as well as 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. Students are tasked with evaluating the CPRs by balancing corporate-growth objectives with the economics of the projects.
Number of Pages in PDF File: 21
Keywords: discounted cash flow, capital budgeting, capital investment, internal rate of return, net present value
Date posted: June 14, 2009
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