A Problem Facing the Timber Industry Is the Absence of Any

question 19

Multiple Choice

A problem facing the timber industry is the absence of any effective way to prove that rain forest timber was legally harvested.In places like Indonesia as much as 80 percent of timber available for sale was illegally cut.Companies like The Home Depot do not want to sell timber from illegally logged forests even though the demand is great for timber from rain forests.Which of the following conditions required for an exchange to occur is missing when a company tries to sell illegally acquired logs to The Home Depot?

• A) There are more than two parties involved.
• B) Each party has something of value to bring to the exchange.
• C) One party is free to accept the exchange offer.
• D) Each party believes it is appropriate to deal with the other party.
• E) Nobody sees the exchange as producing value.

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Definitions:

Interest

The cost of using someone else's money or the return on invested capital.

Land Improvements

Enhancements made to a plot of land to increase its value, such as landscaping, fencing, and installing irrigation systems.

Fixed Assets

Long-term tangible assets used in business operations, not expected to be converted into cash within a year, such as buildings and machinery.

Current Assets

Items of value that are likely to be cashed in, sold, or expended within the span of a year or throughout the usual functioning period of the company, whichever period lasts longer.