Question: Consider the two business units below. Which business is most likely to have growth capital initiatives approved? Business Unit 1 Business Unit 2 Revenue

Consider the two business units below. Which business is most likely to

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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