Please answer the question below in as much detail as possible. Thanks a lot for you help

ABB Electronics Ltd is an established company that has continued to be profitable in recent years despite operating at below full capacity. Continued investment in research and development has produced a new innovative product, the microwave drier, which is able to dry most garments at considerably lower cost than conventional tumble driers. Market research supports the proposed price of 400 per drier with the following predicted sales over the next five years: The company accountant has collated the following casting information relating to the drier proposal: Research and Development costs incurred to date Additional pre-production costs Capital cost of production machinery Resale value of machinery after 5 years Due to the additional manufacturing and selling activity ABB's working capital requirements will increase by 200,000 at the start of the project with further changes each year-end as follows: Additional information: Manufacturing costs: Direct Materials Direct Labour Variable Overheads Depreciation of machinery Amortisation of R & D costs Other fixed costs (Note 1) Selling & Distribution costs: Note 1: To increase output above 32,000 driers per year shift working will be introduced and annual fixed manufacturing costs will rise by 600,000. Note 2: Annual fixed selling and distribution costs will increase by 100,000 for sales in excess of 33,000 driers and a further 100,000 for sales in excess of 38,000 driers. The accountant has specifically excluded all costs relating to the factory unit in which the new machinery will be installed and operated. She explains that tins unit is on a short lease that has only 7 years left to run and ABB Electronics pays 1,500,000 per year in rental. There is no prospect of ABB using this unit unless the drier project is accepted. Whilst ABB has not been using this unit, part of it has been sub-let to a neighbouring company at a monthly rent of 100,000. This arrangement could continue until the lease expires. If the drier project goes ahead ABB can initially share the unit but the rental income will fall to 50,000 per month. Once output exceeds 30,000 units ABB will need additional packing and storage space, so rent will be reduced to 25,000 per month. If output exceeds 33,000 driers per year ABB will need the whole factory unit. Given its critical nature you have been called in as a consultant to advise ABB's Board of Directors with re spec t to this project. ABB normally ignores tax and inflation when considering such capital assessments and its usual discount rate, for projects of average risk, is 12%. Required: As the microwave drier uses new technology this is a relatively high risk project. Explain how this risk might be reflected in the project appraisal using tech niques such as Sensitivity Analysis