Q2: Musharaka and Mudaraba

A. A and B established a Mudaraba company where B is the Mudarib, find

a) if profit after first year was USD 900,000:, How much A and B will get if profit sharing ratio between them is 75:25? (3 MARKS)

b) if losses after first year was USD 10,000 How much share on this losses?

B. 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%. (7Marks)

a) Determine the Capital loss after First Year

b) if the project is abandoned leading to the termination of the Musharakahcontract, the IFI claims should be only?