VS 2010 Targeted .Net Framework 2.0 but asking for 4.0 at installation

I have created an app which targets .net fw 2.0. And for this app i have also created an Setup Project. In which, in the Prerequisites as .net fw 2.0 was not listed i have chosen version 3.0 as prerequisites and created an setup file.

but when i run the setup file on another computer it says .net 4.0 is required. Can u please explain and help me with this behavior.And also why .net 2.0 wasn't listed in the prerequisites?

thanks
regards