2n Christina invested $3,000 five years ago and earns 2 percent annual interest. By leaving 27) her interest earnings in her account, she increases the amount of interest she earns each year. The way she is handling her interest income is referred to as: A) compounding. 8) aggregating C) simplifying D) discounting E accumulating 28) You want to start a business that you believe can produce cash flows of $5,600, S48,200, 28) and $125,000 at the end of each of the next three years, respectively. At the end of three years you think you can sell the business for $250,000. At a discount rate of 16 percent, what is this business worth today? A) $280,894.67 B) S297,077.17 C$325,837.8 D) S314,011.33 E) $258,803.02 9) The Lumber Yard is considering adding a new product line that is expected to increase annual sales by $292,000 and expenses by $196,000. The project will require $105,000 in fixed assets that will be depreciated using the straight-line method to a zero book value over the 9-year life of the project. The company has a marginal tax rate of 34 percent. What is the depreciation tax shield? A) S11,550 B) S11,031 C) S3301 D) S3967 E) S11,107