Assets whose value is sharply reduced outside a particular relationship are called:
A) Specific investments
B) Fixed investments
C) Variable investments
D) Fixed costs
E) Variable costs

Question

Quizplus · Accepted Answer

Specific investments are assets whose value is highly dependent on a particular relationship or event, such as a certain business partnership or contract. If that relationship or event ends or changes, the value of the asset can sharply decrease. Fixed investments are not highly dependent on a specific relationship, while variable investments may see fluctuations in value due to various external factors. Fixed costs and variable costs are not relevant to the definition of specific investments.

Assets Whose Value Is Sharply Reduced Outside a Particular Relationship