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A. Bistari Holdings has two divisions: Timur and Barat. It monitors the divisions' investment potentials based on return on investment (ROI). All investments by
A. Bistari Holdings has two divisions: Timur and Barat. It monitors the divisions' investment potentials based on return on investment (ROI). All investments by the divisions are expected to earn a minimum 10 percent required rate of return. Recently, Bistari Holdings announced a new investment that could increase a division's average operating assets by RM150,000 and operating net income by RM43,000. There is only one investment of this kind that is available to only one division. Therefore, the management is evaluating which division would benefit more from the investment. Timur Division's operating assets was RM1,250,000 at the end of 2020, a 5 percent increased over the 2019 year-end balance. It's operating income for the year 2020 was RM195,000. Barat Division's average operating assets was RM2,700,000 for the year 2020, with the operating income of RM360,000.
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