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Question 6 (20 marks) (brief paragraph 200 words) (i) Your friend Tom Jones just got...

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Finance

Question 6 (20 marks) (brief paragraph 200 words) (i) Your friend Tom Jones just got a job at Tesla and is in a meeting with Elon Musk. Tesla is forecasting exponential growth on its car sales, and Elon Musk wants to have a better understanding of growth rates. Elon Musk asks Tom Jones to explain the assumptions that underlie the sustainable growth rate and interpret what the sustainable growth rate means for the company.

(ii) Your friend Tom Jones applied for a mortgage. Tom Jones wants you to explain to him the relationship between the monthly payments he must make and the amortization period. Tom Jones prefers to invest his money in the stock markets as opposed paying down his mortgage. He asks you for advice on whether he should increase his monthly mortgage payments. Based on what you have learned in Managerial Finance, provide Tom Jones with your advice.

(iii) Your friend Tom Jones has just opened a small business. Tom Jones is unsure about the difference between the Capital Cost Allowance and the Depreciation rate, and how this impact his taxes. Tom Jones asks for your help to explain this.

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