BKB has been aggressively competing for new businesses and has just won a few construction tenders worth RM480 million from the government and private sectors. The current gross development value (GDV) of the company is approximately RM2.5 billion including the recent tender value. It expects to generate net profit of RM185 million against the revenue of RM650 million in the financial year ending in December 2016. In view of the growing business, BKB has outlined the following financing needs in view of the growing business. No. Purpose Cost (RM) Market Value (RM) Amount (RM) 1. To finance working capital requirement - - 3,500,000.00 2. To finance the construction of BKBs new head office in Kota Damansara 20,000,000.00 - - 3. To purchase construction equipment and heavy machines 2,000,000.00 - - 4. To purchase one hectare of a vacant plot of land for storing vehicles and machines - 5,000,000.00 - 5. To build storage facilities on the vacant plot of land 3,500,000.00 - - Total 25,500,00.00 5,000,000.00 3,500,000.00 BKB has the following freehold properties free from any encumbrances: 1. Three hectares of land in Kota Damansara with a total current market value of RM30 million. 2. Ten hectares of land in Iskandar Malaysia with a total current market value of RM80 million. 3. Two hectares of prime land in Kuala Lumpur with a total current market value of RM60 million. 7 The credit policy states that ZIB is prepared to grant a margin of financing between 75% and 85% for term financing. The capital contribution ratio that ZIB is prepared to accept for a profit- loss sharing financing contract is 40 (Bank): 60 (Customer). The current Base Financing Rate (BFR) of ZIB is 6.70% per annum. Required: (a) Suggest the financing structures suitable for BKB based on its financing needs. Your answer should include the generic type of financing, a specific Islamic financing contract, financing amount, tenure and pricing (financing/profit rate). (10 marks) (b) Identify the risks associated with each of the proposed financing structures. (5 marks) (c) Based on (a) above determine the amount of capital contribution that the customer must make based on the proposed financing structures. (8 marks) (d) Assuming that you propose a Musharakah Mutanaqisah financing to part finance the construction of the new headquarters of BKB calculate the financing amount that ZIB is willing to consider. (4 marks) (e) Suggest ONE (1) type of collateral to secure each of the financing facilities that you proposed in part (a) above. (4 marks) (f) Noting that today is 15 January 2016; using your general business and economic knowledge assess briefly the internal and external conditions affecting the business of the company. (5 marks) (g) What conclusions can you make with respect to the capital and conditions of the company? (8 marks) (h) Explain briefly THREE (3) aspects of financial performance of BKB that would help you determine its ability to repay the financing amount.