You submit only a memo for this case.
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This case puts you in the role of Doug Scovanner as he considers the pros and cons of five capital-investment proposals that are expected to require extra attention from the committee members.
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Answer all the questions:
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Rate five projects from most to least attractive to Target. Explain your choice. Remember the corporation’s business and financial objectives: NPV may be only part of the consideration for a capital-project request. Which of the five CPRs should CEC accept? Consider in your response: (1) the NPV and IRR, (2) the size of the project, (3) the cannibalization of other stores’ sales, (4) sensitivities, (5) variance to prototype, (6) customer demographics, and (7) brand-awareness impact.
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Why does Target use different discount rates for the store and the credit cards? Do you agree? Why?
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As a member of the CEC, would you approve CPR if Target would need to use external funds?
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