Jackie chin waste management has a subsidiary that disposes

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Jackie Chin Waste Management has a subsidiary that disposes of hazardous waste and a subsidiary that collects and disposes of residential garbage. Information related to the two subsidiaries follows:

                                                                                    Hazardous               Residential

                                                                                       Waste                       Waste

Total assets                                                                 $12,000,000             $72,000,000

Noninterest-bearing current liabilities                             3,000,000                12,000,000

Net income                                                                      1,700,000                  6,000,000

Interest expense                                                              1,250,000                  2,300,000

Required rate of return                                                           8%                             10%

Tax rate                                                                                  35%                             40%

Based on the limited information, which subsidiary is the best candidate for expansion?

Reference no: EM13577453

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