Company X is evaluating the purchase of a new machine and has the following information: Initial investment: 350 000 Residual value: nil Expected life: 10 years Sales volume: 20 000 units per year Sales price: 8.50 per unit Variable cost: 3.50 per unit Fixed costs: 24 875 per year Cost of capital: 15% (a) Calculate the payback period, NPV of the project. How would you calculate IRR of the project? (b) Assess the sensitivity of the NPV to the change in sales price.