BP and Exxon Mobil Possess Significant Capabilities in Exploration, Extraction

question 76

Multiple Choice

BP and Exxon Mobil possess significant capabilities in exploration, extraction, refining, and distribution. These companies are categorized as highly ________ because they are involved in every stage of the value chain.

• A) integrated
• B) diversified
• C) tangible
• D) capable

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Definitions:

Net Income

The total profit of a company after all expenses and taxes have been subtracted from total revenue.

Fixed Costs

Expenses that do not change in proportion to the level of goods or services produced within a certain period.

Hurdle Rate

The minimum rate of return on a project or investment required by a manager or investor.

Cost of Capital

The rate of return that a company must earn on its project investments to maintain its market value and attract funds.