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?