The Manufacturer Company “Pulse” would like to expand
its business by opening a new branch in other City. Pulse did
investment appraisal and came up with total initial investment cost
of Rs.700, 000. However, the budget of the company is limited, they
are able to invest only 40% of investment cost and they decided to
go with Musharakah agreement which is given by Islamic Bank. In
that type of agreement, all parties agreed that profit ratio is
exactly proportional with the investment of each partner. At the
end of maturity of this project, they realized $60,000 as a
profit.
• What is investment cost in Rupees of Islamic Bank and
Manufacturer Company “Pulse” respectively?
• What is profit of Islamic Bank and Manufacturer Company “Pulse”
correspondingly?
• How much in total Islamic Bank will get at the end of maturity of
the project? Manufacturer Company “Pulse”?
Initial cost = 700,000
Manufacturer Company “Pulse” able to invest only 40% ,Remaining 60% investment made buy Islamic Bank .
Profit ratio is exactly proportional with the investment of each partner( 4:6 )
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