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Target Corporation

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Running head: TARGET CORPORATION 1
Target Corporation
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TARGET CORPORATION 2
Target Corporation
Question One
Which of the Five CPRs Should Doug Scovanner Accept? Be Prepared to Explain How
Each of the Considerations That Follow Influenced Your Decision:
NPV and IRR. Based on NPV and IRR, the most appropriate CPRs that Doug should
consider are either Gopher Place, Whalen Court, The Barn, or Stadium Remodel. Basically, these
four have high NPV and IRR. However, the small population of only 70,000 individuals and a
12% population of individuals with more than four years of college disqualifies Gopher Place.
The Barn also has only 17% of individuals with more than four years of college. Further, the area
where The Barn will be located has a low average income of $38,000. Therefore, this is not an
attractive market for Target Corporation.
At 10.8%, Stadium Remodel has a slightly higher IRR than Whalen Court. However, at
$15.7 million, its NPV is much less than Whalen Court’s $25.9 million. In addition to this, 45%
of the entire population Whalen Court has more than four years of education. Therefore, Whalen
Court presents the best choice when considering NPV.
Size of the project. When considering the size of the project, the main aim of the
financial analyst is to evaluate the return on capital invested. In this case, Gopher Place, The
Barn, and Stadium Remodel provide the best options. Goldie’s Square and Whalen Court have
an NPV that is very low when compared to the capital invested. Therefore, they are not
appropriate choices. The Barn is the best option when compared with Gopher Place and Stadium
Remodel because it has an NPV that is greater than the capital invested.
Cannibalization of other store sales. The Barn provides the best opportunity to
cannibalize other stores. The Barn's construction leads to cannibalization of the existing market

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Running head: TARGET CORPORATION Target Corporation Student’s Name Institution Affiliation 1 TARGET CORPORATION 2 Target Corporation Question One Which of the Five CPRs Should Doug Scovanner Accept? Be Prepared to Explain How Each of the Considerations That Follow Influenced Your Decision: NPV and IRR. Based on NPV and IRR, the most appropriate CPRs that Doug should consider are either Gopher Place, Whalen Court, The Barn, or Stadium Remodel. Basically, these four have high NPV and IRR. However, the small population of only 70,000 individuals and a 12% population of individuals with more than four years of college disqualifies Gopher Place. The Barn also has only 17% of individuals with more than four years of college. Further, the area where The Barn will be located has a low average income of $38,000. Therefore, this is not an attractive market for Target Corporation. At 10.8%, Stadium Remodel has a slightly higher IRR than Whalen Court. However, at $15.7 million, its NPV is much less than Whalen Court’s $25.9 million. In addition to this, 45% of the entire population Whalen Court has more than four years of education. Therefore, Whalen Court presents the best choice when considering NPV. Size of the project. When considering the size of the project, the main aim of the financial analyst is to evaluate the return on capital invested. In this case, Gopher Place, The Barn, and Stadium Remodel provide the best options. Goldie’s Square and Whalen Court have an NPV t ...
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