An agreement which commits the firm to a set of fixed conditions in the future regardless of what happens to profits or the economy as a whole is a definition of a:
A) contingent liability.
B) commitment.
C) conditional contract.
D) potentially hazardous agreement.

Question

Quizplus · Accepted Answer

A commitment is an agreement that obligates the firm to undertake specific future actions, regardless of changes in the external environment. A contingent liability is a potential obligation that may arise if certain conditions are met in the future, such as a lawsuit or warranty claim. A conditional contract is a contract that is dependent on the occurrence of a specific event. A potentially hazardous agreement is not a common term in financial or legal contexts.

An Agreement Which Commits the Firm to a Set of Fixed