Even Though the Electricity That Powers Them Is Generated Primarily

question 17

Multiple Choice

Even though the electricity that powers them is generated primarily from burning fossil fuels, electric cars are still more efficient than gas-powered vehicles because:

• A) they are much lighter
• B) energy is produced more efficiently at power plants than inside vehicles
• C) their batteries are much more efficient
• D) they can transport more people per vehicle

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Definitions:

Cost of Debt Financing

The total expenses a company incurs in order to borrow money, including interest payments, transaction fees, and any other associated costs.

Business Risk

The exposure to factors that can lead to a reduction in the value of an investment or in the revenues of a business.

Systematic Risk

A risk that influences a large number of assets. Also called market risk.

Optimal Capital Structure

The best mix of debt and equity financing that minimizes the company's cost of capital and maximizes its value.