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A group of several shareholders formed the Alacatel Group of companies (the Group) to make investments in Malaysia. So far, MIDA has not granted the

A group of several shareholders formed the Alacatel Group of companies (the Group) to make investments in Malaysia. So far, MIDA has not granted the Group any tax exemptions. The Group is comprised of four wholly owned Malaysian tax resident subsidiaries, each of which derives income from a single principal activity. The following are the profiles of these subsidiaries: ADUDU Sdn Bhd has been a reputable manufacturer since 2010. The company continuously achieves value additions of 30 to 35 percent per year. In 2019, the company entered the American export market for the first time, and it anticipates a 20 percent annual increase in export revenue in the coming years. Out of total annual sales of RM12 million, it exported RM2 million. BOBO Sdn Bhd has been manufacturing high precision glass product for the past four years. In 2020 it plans to invest RM12 million to automate its operations in order to achieve increased output without an increased dependence on scarce labour. • CHICHI Sdn Bhd is currently inactive. It intends to invest approximately RM200 million in capital expenditure over three years (in the ratio of 50:30:20 for Year 1:Year 2:Year 3) to manufacture a promoted product. It will take at least four years for the company to become profitable. DADOO Sdn Bhd is a newly incorporated company which is to undertake a logistic activity business, a promoted activity. This business is expected to be profitable within three months after its commencement and to generate an annual statutory income of RM20 million. 


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Determine, by giving reasons, which incentive measure is the most suitable for each of the companies: ADUDU Sdn Bhd;

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