Your Car Is Coasting on Level Ground at 60 Km/h

question 56

Multiple Choice

Your car is coasting on level ground at 60 km/h and you apply the brakes until the car slows to 40 km/h.If you suddenly release the brakes now,the car tends to

• A)momentarily regain its higher initial speed.
• B)continue moving at 40 km/h.
• C)decrease in speed if no other forces act.

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Definitions:

Debt-to-Total-Assets Ratio

The debt-to-total-assets ratio measures the percentage of a company's assets financed by creditors, indicating the degree of financial leverage.

Du Pont Equation

A formula that breaks down the components of a company's return on equity into three parts: operating efficiency, asset use efficiency, and financial leverage.

ROE

Return on Equity; a measure of financial performance calculated by dividing net income by shareholder's equity, indicating how well a company uses investments to generate earnings growth.

Sales

The total amount of goods or services sold by a company, a primary source of revenue for businesses.