Which financial metric would help assess the return generated by a specific business unit?

The selection of profit centres as the correct financial metric for assessing the return generated by a specific business unit is grounded in its purpose and functionality within an organization. A profit centre is a branch or department of a company that is accountable for generating revenue and managing its own expenses, allowing it to measure profitability independently. This structure enables businesses to evaluate the financial performance of individual units, identify successful strategies, and highlight areas for improvement based on their ability to generate profit.

In contrast, cost centres focus solely on managing costs and do not have direct responsibility for generating revenue. Budget variances measure the difference between budgeted and actual figures, which can provide insights but do not directly reflect the profitability of a specific business unit. Debt ratios assess a company's financial leverage and risk, but they do not give insight into the operational performance or profitability of distinct units within the business. Thus, profit centres are essential for evaluating the return on investment specifically associated with a business unit, making them the most suitable choice in this context.