Two Spaceships That Have Different Masses but Rocket Engines of Identical

question 7

Multiple Choice

Two spaceships that have different masses but rocket engines of identical force are at rest in space.If they fire their rockets at the same time,which ship will speed up faster?

• A) the ship with least mass
• B) the ship with greatest mass
• C) The spaceships will increase speed at the same rate because they have identical rocket engines.
• D) The spaceships will not speed up at all; they will move at a constant speed because they are in space and the rocket has nothing against which to push.

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Definitions:

Discount Rate

The interest rate used to discount future cash flows to their present value, often reflective of the cost of capital or rate of return required.

Beta

A measure of a stock's volatility in relation to the overall market. A beta greater than 1 indicates a stock is more volatile than the market, while a beta less than 1 suggests it is less volatile.

Risk-Free Rate

The anticipated financial gain from an investment devoid of any risk, frequently indicated by the yields of government bonds.

After-Tax Cost of Debt

The net cost of debt after accounting for the tax deductions available on interest payments.