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

Question

Quizplus · Accepted Answer

The construction of a chemical plant that manufactures only a specific type of paint is the most irreversible investment project as it involves significant capital investment and specialized equipment that cannot be easily or cost-effectively repurposed for other uses. Once the plant is constructed, it would be difficult to switch to another type of production, making it a long-term commitment. The other options (A, B, and C) all involve spaces that can be easily repurposed, making them less irreversible investments.

Which Investment Project Is Most Irreversible