Target Corporation

8984 WordsSep 14, 201036 Pages
Cranefield College of Project and Programme Management MODULE M6 Financial Management of Corporate Projects and Programmes Case: TARGET CORPORATION 1. Executive Summary Target corporation has a growth strategy of opening 100 new stores per year. Doug Scovanner, the CFO of Target Corporation is preparing for the November meeting of the Capital Expenditure Committee (CEC). He is one of the executive officers who are members of the CEC. With the fiscal year’s end approaching in January, there…show more content…
The rule of internal rate of return is that the project with the higher rate of return must be accepted because its gives the clear indication that the project will succeed Advantages of Internal rate of return  It is not complicated to understand and communicate Disadvantages of Internal rate of return  This method may results in multiple answers or not deal with non conventional cash flow  May lead to incorrect decision in comparison with mutually exclusive investment  Another problem with IRR comes about when cash flow are not conventional Graph showing the internal rate of return of 5 possible project * Gopher place 12.3% * Whalen court 9.8% * The barn 16.4% * Goldie’s square 8.1% * Stadium remodel 10.8% Projected profits and earnings per share Target corporation uses projected profit as one its criteria to accept or reject the project, the entities sales had increased a lot from the previous years so the company project the project of the of new project by taking into account the existing stores profits. Earnings per share of target corporation for financial year ending January 2006 is $2.73 per share according

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