Problem 2. If National Health Care Corp. reported earnings per share of $5.82 in 2000 and $21.26 in 2011, at what annual rate did earnings per share grow over this period?

Problem 4. You are looking to purchase the latest model of the BMW 750 luxury sedan. The price of the car is $82,000. However, you negotiate a six-year loan, with no money down and no monthly payments during the first year. After the first year, you will pay $1,500 per month for the following five years, with a balloon payment at the end to cover the remaining principal on the loan. The APR interest rate on the loan with monthly compounding is 7 percent. What will be the amount of the balloon payment six years from now?

Problem 8. Times are tough for Auger Biotech. Having raised $85 million in an initial public offering of its stock early in the year, the company is poised to launch its product. If Auger engages in a promotional campaign costing $60 million this year, its annual after-tax cash flow over the next five years will be only $700,000. If it does not undertake the campaign, it expects its after-tax cash flow to be minus $18 million annually for the same period. Assuming the company has decided to stay in its chosen business, is this campaign worthwhile when the discount rate is 10 percent? Why or why not?