KOHL'S CAPITAL BUDGETING 1x1 - Running head CAPITAL...

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Running head: CAPITAL BUDGETING 1 CAPITAL BUDGETING Name: Institution: Course: Date:
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CAPITAL BUDGETING 2 Introduction Long-term Projects’ investments consist of the critical amount of uncertainties and risks and thus for effective decision-making capital budgeting techniques are mandatory for identifying potential risks and their impact on the financial aspect of an organization. Evaluation is, therefore, important in ensuring that the organization obtains maximum value from the investment. Capital budgeting refers to the process of analyzing various options of investments in addition to selecting the identified investment opportunity to pursue. In this paper, some of the capital techniques to be used include internal rate of return (IRR), modified rate of return (MIRR), Net present value (NPV) and the Profitability Index (PI). Proposed capital budgeting for Kohl’s -Restaurant’s loyalty program systems (Ehie, Oyatoye, & Joseph, 2016). Description of Proposed Capital Budgeting Project Kohl’s has unveiled new initiatives under the company’s overarching strategic framework referred to as the ‘Greatness Agenda’. The multi-year plan was designed to drive the company’s top growth via seeking out and as well taking advantage of the opportunities critical for the acceleration of the entity’s growth. The chairman, CEO and the presidents of Kohl’s Kevin Mansell shared the update strategy undertaking that in the first year of the Greatest Agenda, there was an immediate success in the newly launched YES2 YOU REWARDS loyalty program. This year Kohl’s seeks out to take advantage of seizing opportunities in expanding its good performing stores while at the same time closing existing underperforming stores ( Funk, Ready, Slaff& Waldron, 2016). Starting with one of its department stores, Kohl’s has decided to open an 80-seat restaurant after consultation and market research of $2000 in line with its Greatness Agenda. The
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CAPITAL BUDGETING 3 top management decided to grow the restaurant to include a loyalty program systems that can allow the restaurant to offer new and fresh goods like beer and other drinks to customers. For this
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