Casey and Mark Are Running a Race at Constant Speeds

question 183

Multiple Choice

Casey and Mark are running a race at constant speeds. The graph below shows the distance d (in miles) they have traveled since they started the race at time t (in minutes) . Which one of the following statements is true?

• A) Not enough information
• B) Mark is running faster than Casey.
• C) Casey is running at 0.23 mph while Mark is running at 0.31 mph.
• D) Casey is running at 4.3 mph while Mark is running at 3.2 mph.
• E) Casey and Mark are both traveling at the same constant speed.

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Definitions:

Degree of Operating Leverage

A financial ratio that measures the sensitivity of a company's operating income to its sales volume, highlighting the impact of fixed costs.

Variable Expenses

Costs that vary directly with the level of production or sales volume.

Operating Income

Earnings before interest and taxes (EBIT), representing the profit from a company’s ordinary, core business operations.

Contribution Format

An income statement layout that separates fixed and variable costs, allowing for the calculation of contribution margin and easier analysis of profitability.