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b. The Crystal Corporation (CC) is developing a new crystal vase manufacturing machine that is expected to last for three years. The machine will cost 30,000 and will be depreciated fully based on straight line method over its three-year useful life. The machine will produce 2000 crystal vases in year 1, all of which will be sold. Sales are expected to grow by 10% each year through to year three. The sale price per crystal vase that CC will charge is 18 and the cost to manufacture each crystal vase is 9 each, both of which are assumed to remain constant over the next three years. There are no additional fixed costs. Installation of the machine and the resulting increase in the annual manufacturing capacity will require additional investment in net working capital (NWC) equal to 10% of annual sales, as follows: Year 0 1 2 3 Net working capital (NWC) required 3,600 3,960 4,356 Change (investment) in NWC -3,600 -360 -396 The total amount invested in additional NWC will be recouped at the end of Year 3. The firm is in 35% tax bracket and has a cost of capital of 10%. You are required to determine Free Cash Flows for each of the three years and the NPV of the new machine. Should CC develop the new machine? [50 Marks] c. Critically evaluate sensitivity analysis as an approach to assess project risks. (Word limit: 200)