KL Bank finances a business venture company with (Malaysian ringgit) MYR500,000 under a Mudaraba contract. The...

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KL Bank finances a business venture company with (Malaysian ringgit) MYR500,000 under a Mudaraba contract. The bank is the Rab al Maal and the company is the Mudarib. The total sales revenue of the company is MYR 300,000 per annum. The cost of goods sold and other general expenses are MYR140,000 per annum. Capital repayment to the bank is a quarter of the profit generated. The balance of the profit is shared between the bank and the company in a ratio of 2:1. Assuming sales reve- nue and all costs to remain constant, how long will it take to repay the original capital to the bank? Calculate the profit amounts the bank and the company receive each year minus the capital repayment. KL Bank finances a business venture company with (Malaysian ringgit) MYR500,000 under a Mudaraba contract. The bank is the Rab al Maal and the company is the Mudarib. The total sales revenue of the company is MYR 300,000 per annum. The cost of goods sold and other general expenses are MYR140,000 per annum. Capital repayment to the bank is a quarter of the profit generated. The balance of the profit is shared between the bank and the company in a ratio of 2:1. Assuming sales reve- nue and all costs to remain constant, how long will it take to repay the original capital to the bank? Calculate the profit amounts the bank and the company receive each year minus the capital repayment.

Answer rating: 100% (QA)

Answer 1 In order to calculate how long it will take to repay the original capital to the bank we need to determine the annual profit generated by the ... View the full answer