When Diamonds Are Mined in Conflict or War-Torn Areas, There

question 109

Multiple Choice

When diamonds are mined in conflict or war-torn areas, there is

• A)more loss from auctioning off the resource.
• B)minimal waste of this resource.
• C)strong incentive for conservation.
• D)strong incentive for overmining.

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Definitions:

Cost of Capital

The required return necessary to make a capital budgeting project, such as building a new factory, worthwhile.

Net Investment

The total amount spent on purchasing new capital assets minus depreciation on existing assets, indicating the actual increase in a company's capital stock.

Cash Operating Costs

Expenses directly related to the daily operational activities of a business, excluding financing costs and taxes.

Depreciated

An accounting process of allocating the cost of a tangible asset over its useful life, reflecting its decrease in value over time.