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Omicron Bhd is paint manufacturer with a number of divisions. Brief details of the Sinovac and Moderna divisions are set out for the year ended

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Omicron Bhd is paint manufacturer with a number of divisions. Brief details of the Sinovac and Moderna divisions are set out for the year ended 30 September 2021. Sinovac Moderna (RM million) (RM million) 4.2 5.6 20.0 32.0 4.5 Net Profit for the year ended 30 September 2021 Net book value of noncurrent assets as at 1 October 2020 Additions to non-current assets on 2 October 2020 Depreciation for year ended 30 September 2021 Net book value of noncurrent assets at 30 September 2021 Noncurrent assets Total net assets at 30 September 2021 (4.0) 20.5 11.5 32.0 (6.2) 25.8 10.2 36.0 There were no sales of noncurrent assets during the year. Depreciation has been changed on the basis of assets in use. The cost of capital used by Omicron Bhd is 12%. The budgeted assets and profits for Sinovac and Moderna for the year 30 September 2022 are identical to those at the end of the previous year. A new investment in computerized mixing equipment is available to either Sinovac or Moderna at the beginning of the year 2022. This investment would increase total net assets by RM25 millions and produce annual net profits of RM3.5 million for many years to both individual divisions. c) Discuss whether Sinovac and Moderna would want to take the new investment opportunity in year 2022 as described above. Provide calculations to support your answers. (11 marks) (PLO2:CLO2:C5)

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