Which of the following investments can be classified as specific assets?
A)Opening a restaurant in the business district of a city.
B)Purchase of additional cotton bales expecting a rise in demand for cotton garments.
C)Leasing out land in a tourist spot to build a retail outlet.
D)Purchasing specialized equipment for a hydro-electric power project that will not produce electricity at a different location.

Question

Quizplus · Accepted Answer

Specific assets are investments that are unique, have a high value, and are not easily tradable. Purchasing specialized equipment for a hydro-electric power project that will not produce electricity at a different location is a specific asset because it is unique, expensive, and not easily tradable. The other options, opening a restaurant, purchasing cotton bales, and leasing out land, are not specific assets as they are either not unique or easily tradable.

Which of the Following Investments Can Be Classified as Specific