Scenario: ABC is planning to expand its operations and wants to install Plant and Machinery (PM) costing Rs. 75 million. Direct cost including accessories and installation is estimated at Rs. 5 million. Customer has decided to contribute Rs. 20 million and the remaining amount will be contributed by XYZ Islamic Bank (the bank). PM was purchased on April 1, 2019. The installation process of PM would take 2 months. The tenure of Musharakah financing was agreed to be 5 years. Rentals will be paid biannually. Bank’s share will be divided into units and ABC will undertake to purchase the bank’s units biannually to become the sole owner of the asset. Answer to the following questions? 1. Devise the Process flow for the transaction. 2. At what time rentals will be started?
Breakeven Analysis
Break Even Analysis is a term used in business, cost accounting and economics. It refers to a point where the total cost incurred becomes equal to the total revenue earned. Break Even Analysis determines the number of units to be sold to earn the revenue required to cover the total costs. Total cost is a sum total of fixed and variable costs.
Process analysis
The term process analysis can be defined as breakdown of production process into different phases that converts inputs into output. A series of routine activities are incorporated using organizational resources with a view to achieve operational excellence.
Scenario:
ABC is planning to expand its operations and wants to install Plant and Machinery (PM) costing Rs. 75 million. Direct cost including accessories and installation is estimated at Rs. 5 million. Customer has decided to contribute Rs. 20 million and the remaining amount will be contributed by XYZ Islamic Bank (the bank).
PM was purchased on April 1, 2019. The installation process of PM would take 2 months. The tenure of Musharakah financing was agreed to be 5 years. Rentals will be paid biannually. Bank’s share will be divided into units and ABC will undertake to purchase the bank’s units biannually to become the sole owner of the asset.
Answer to the following questions?
1. Devise the Process flow for the transaction.
2. At what time rentals will be started?
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