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Guillermo will have to conduct a sensitivity analysis and compute net present value of his company, in relation to the application of the alternatives. According to Emery, Finnerty and Stowe (2009), sensitivity analysis determines how sensitive the business is to variations of the different parameters in the business such as fixed and variable cost. Guillermo will have to determine how his business will be affected to changes in capital, fixed and variable costs and how these changes will affect sales and profit. To determine the sensitivity of the business, we will have to discuss and calculate the net present value of money (NPV), the weighted average cost of capital, and the internal rate of return. Before making any investment decision, it is important for the investor to consider that each asset has its own, ...