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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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