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Evaluate the financial impact of a new customer loyalty program at Starbucks using NPV and IRR. Calculate the initial investment required and projected cash flows
Evaluate the financial impact of a new customer loyalty program at Starbucks using NPV and IRR.
Calculate the initial investment required and projected cash flows from increased sales.
Determine the NPV and IRR based on a given discount rate.
Conduct a sensitivity analysis to see how changes in customer retention rates affect profitability.
Provide recommendations on whether to implement the program.
Investment Components | Initial Investment ($) | Annual Cash Flows ($) | Discount Rate (%) |
Loyalty Program | $50,000,000 | $15,000,000 | 10% |
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