If Mario's Pizza, a large frozen pizza distributor, builds a tomato sauce plant near Red Tomatoes, a large tomato farm, to reduce the costs of transporting fresh tomatoes, the tomato sauce plant is a(n)______ .
A)negotiation cost
B)information asset
C)transaction- specific asset
D)monitoring cost

Question

Quizplus · Accepted Answer

The tomato sauce plant is a transaction-specific asset because it is specifically built to reduce the costs of transporting fresh tomatoes from Red Tomatoes, the large tomato farm. It is an asset that is specific to the transaction between Mario's Pizza and Red Tomatoes, rather than a general asset like an information asset or a monitoring cost.

If Mario's Pizza, a Large Frozen Pizza Distributor, Builds a Tomato