Target Capital Budgeting
A five-investment capital-budgeting analysis using NPV, IRR, downside sensitivity, market demographics, and cannibalization risk to make approve, defer, or decline decisions.
- Role
- Financial analyst
- Context
- FIN 325 case
- Team
- Individual analysis
- Deliverable
- Financial model + recommendation
Summary
The question
Target had multiple investments competing for capital, each with different scale, local economics, growth prospects, and exposure to existing-store cannibalization.
What I did
- Modeled cash flows, NPV, and IRR for five alternatives ranging from smaller-format stores to a major expansion investment.
- Added a 10% sales downside case to identify which recommendations remained resilient when operating assumptions weakened.
- Combined the financial outputs with demographic fit, market attractiveness, and cannibalization risk to reach a decision for each project.
What it showed
Capital allocation is stronger when the model does not end at a ranking; the recommendation also explains what could break, what should wait, and why.
From the work
A positive base-case NPV did not automatically earn approval. I looked for resilience under weaker sales and whether the project created value for reasons beyond its initial forecast.
Case brief, analytical principle
| Project | Investment | NPV | IRR | NPV at −10% sales | Decision |
|---|---|---|---|---|---|
| The Barn | $13.0M | $20.5M | 16.4% | $16.4M | Approve, top priority |
| Stadium Remodel | $17.0M | $15.7M | 10.8% | −$7.9M | Approve if budget remains |
| Gopher Place | $23.0M | $16.8M | 12.3% | −$4.7M | Approve with conditions |
| Whalen Court | $119.3M | $25.9M | 9.8% | −$16.6M | Defer |
| Goldie’s Square | $23.9M | $0.3M | 8.1% | −$4.1M | Decline |
Whalen Court had the largest NPV but also the largest capital need and the sharpest downside, so it was deferred rather than ranked first.
In my words
This is one example of the many DCF and capital-budgeting models I built during my finance major. The project reflects the type of valuation work I became comfortable producing in Excel. I also earned a Wisconsin School of Business financial modeling credential after completing a fully accurate DCF with an integrated debt schedule.
Documents
- Capital-budgeting case briefPDF · 3 pages · Excel available