Which Investment Project Is Most Irreversible

question 124

Multiple Choice

Which investment project is most irreversible?

• A) the construction of an open office space that can be used for different businesses
• B) the construction of a bank branch location that can be later converted into an insurance company office
• C) the purchase of a Japanese restaurant that can be easily converted into a bistro
• D) the construction of a chemical plant that manufactures only a specific type of paint

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Definitions:

Installment

A method of paying for goods or services or the repayment of a loan in parts, typically on a monthly basis, over a period of time.

Cost Recovery

The process of regaining the value of an investment or expense, often through depreciation, amortization, or directly recouping expenses.

Gross Profit

The financial metric that represents the difference between revenue and the cost of goods sold (COGS) before deducting overhead, payroll, taxation, and interest payments.

Net Sales

The revenue a company earns from sales after subtracting the money refunded for returns, compensation for damaged or missing items, and any discounts offered.