The property value is RM2,000,000 and the expected loss for the property is RM40,000.The maximum loss for the property similar as the property value and the risk was RM980,000. If the investment return of the company was 16%, and the bank interest was 8%.

You are required to calculate :

i Cost of financing loss

(4 marks)

ii Cost of financing risk

4. marks)

iii Cost of retention