Consider the two business units below. Which business is most likely to have growth capital initiatives...
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Consider the two business units below. Which business is most likely to have growth capital initiatives approved? Business Unit 1 Business Unit 2 Revenue EBIT Total Assets $ 12,916 $ 55,299 $ 3,261 $ 11,862 $ 10,305 $ 102,345 Current Liabilities $ 2,809 $ 25,679 Capital Employed $ 7,495 $ 76,667 Return on Capital Employed 44% 15% Business unit #1 because its return on capital employed is higher Business unit #1 because its operating profits (EBIT) are higher Business unit #2 because its revenues are smaller and it has more room to grow Business unit #2 because its return on capital employed is higher Consider the two business units below. Which business is most likely to have growth capital initiatives approved? Business Unit 1 Business Unit 2 Revenue EBIT Total Assets $ 12,916 $ 55,299 $ 3,261 $ 11,862 $ 10,305 $ 102,345 Current Liabilities $ 2,809 $ 25,679 Capital Employed $ 7,495 $ 76,667 Return on Capital Employed 44% 15% Business unit #1 because its return on capital employed is higher Business unit #1 because its operating profits (EBIT) are higher Business unit #2 because its revenues are smaller and it has more room to grow Business unit #2 because its return on capital employed is higher
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