Direction: Carefully read the questions below and answer in your own words.

Part I: Short Answer (4 marks)

Define and explain the following: (2x2 marks each= 4 Marks)

1. Monetary assets
2. Ijarah

Part II : Case Analysis.( 8 marks)

Shariah Legitimacy

1. While explaining the laws of inheritance Allah has permitted Musharakah,

.but if they are more than two, they share a third. (Al-Nisa:12)

2. Verily many are the partners (in business) who wrong each other except those who believe and work deeds of righteousness and how few of them. (Al-Sad: 24)

Part III : Problem Solving.(8 marks each)

1. Based on class discussion determine, solve and illustration. D1

An (IFI) Islamic Financial Institution (IFI) invested in a two year project valued at USD.700,000 by providing 70% of the capital based on the Musharakah contract. At the end of the first year, the project value declined by 40%. What is the impairment loss of the project investment incurred by IFI?

A. Determine capital loss after First Year and impairment loss of the project investment incurred by IFI. Since the project remains viable, the loss is carried forward to the next period then the net asset value. (4 marks)

B In subsequent period, performance is measured based on the outstanding capital. On the other hand, if the project is abandoned leading to the termination of the Musharakah contract, the IFI claims should be only? (4 marks)

2. A and B established a company, if profit after first year was USD 900,000 find below: (10 marks)

1. How much A and B will get if profit sharing ratio between them is 75:25?
2. How much A and B will get if profit sharing ratio between them is 50:50?
3. How much A and B will get if profit sharing ratio between them is 40:60, if profit is greater than benchmark, and benchmark is USD 1000,000. Solve the problems and compare with benchmark (c ) given above.