Islamic finance

Hafiz is about to open a business. He requests for additional capital total $800,000 from his friend, Adira. Hafiz & Adira are decided to distribute the profit or loss of the business 40:60 respectively.

i. Based on the scenario, explain the contract used between Hafiz and Adira with relevant illustration of modus operandi. (20 marks)

ii. After a year running the business, they made a profit of $300,000. How much the profit will Hafiz and Adira get respectively? (5 marks)

iii. In early 2021, their business was affected due to the Covid19. They got affected with the total loss amounting to $50,000. Explain the situation. (5 marks)

iv. Instead of distributing the profit of the business based on the pre agreed ratio, Adira asks for a payment of $2000 per month as a return of the capital. What is your opinion about Adira's request? (10 marks)