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Musharaka with Profits Assume the following: A company is importing and selling Mercedes cars. An Islamic bank invests US$7 million for an 70% profit share.

Musharaka with Profits Assume the following: A company is importing and selling Mercedes cars. An Islamic bank invests US$7 million for an 70% profit share. An investor invests US$1 million for a 30% profit share. The investor is to be paid a 10% management fee as percentage of profit after expenses.

Assume: Sale proceeds = US$12,00,000, Expenses = US$100,000

a. Solve the total return to the bank.

b. Apply the best approach to find the total return to the investor.

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