That's what we do except we hang them from strips of old conveyor belt instead of chains so there is no risk of a shooter hitting a chain and us having to go downrange and reattach a target. We have the MGM flash target and it works well but is costly. We also have the Caldwell piezoelectric one but found it unreliable (wire gets damaged by projectiles/splash - we solved this issue by using steel conduit for the wire but it was a pita to set up).
We've also hung old bowling pins by nylon straps...the nylon straps can take many hits before failing and the pins jump around pretty good when shot making the hits easier to call. They make small targets at 200m though so I usually keep them at 75 or 100.