Which of the following measures are considered "figures of merit" and used in evaluating investment opportunities? A. Payback Period B. Net Present Value C. Internal Rate of Return D. All of the above. You are responsible for making the capital investment decisions for your company, Jungle Gyms Inc. You are evaluating five potential investments and perform discounted cash flow analysis on them using the computed cost of capital. Three of the five projects have positive Net Present Values (NPV), one project has a zero NPV, and one project has a negative NPV. What do you recommend to management? A. Proceed with the three projects that have a positive NPV. Do not invest in the projects with zero or negative NPVs, because they generate no positive value to the company. B. Proceed with all the projects that have a zero NPV or greater. These projects will yield an internal rate of return equal to or above the company's hurdle rate. C. Do not proceed with any of the capital projects because an internal "hurdle rate" has not been specified. D. Delay your capital budgeting decision until additional "figures of merit" calculations can be made. How should financing costs be treated in a discounted cash flow analysis of a project? A. Financing costs are a given part of doing business. They should be deducted from the project's cash flows each year. B. Financing costs are separate from the Weighted Average Cost of Capital calculation. C. Financing costs can be eliminated by issuing stock to fund the project and should be ignored. D. The cost of financing is accounted for in the discount rate applied to future cash flows. It would be redundant to include them in the cash flow analysis. The concept of capital rationing A. allows capital to be allocated to all projects under consideration. B. uses different discount rates to evaluate alternative investments. C. recognizes that capital available is limited and suggests that only the investments with the highest returns be made until the funds available for investment are exhausted. D. suggests that capital is limited in any one year and that additional capital investment will be made in later years