Bank invest in project as Sharik (sleeping partner) and the project manager will act as managing partner. The managing partner borrows Rs. 10,000 capital from the bank which he invests into the project. This loan must be repaid at the maturity of the project whether profits or losses are made. The bank contributes capital of Rs. 50,000. No other capital sources are used. Profit sharing ratio is agreed at a ratio of 70% to bank and 30 % to managing partner. The balance of any profit is paid to the other partner(s) in the scheme.

Required: Provide the solutions/ distribution of profit/loss of following potential outcomes:

1) Profits of Rs. 2,500 are made

2) Losses of Rs. 2,000 are made 

3) Identify the type of Musharkah

Answer rating: 100% (QA)

Given Infrmtin rtners re 1 Bnk with itl f Rs 50000 2 rje... View the full answer