| |
|
Agreed
Ratio
For Profit
Sharing |
Rupees |
A) |
Client’s
investment |
70% |
Rs.
100 |
B)
|
Institution’s
investment |
30% |
Rs.
100 |
C) |
Total
Investment (A+B) |
|
Rs.
200 |
D) |
Agreed
Projected Rate of Return on Total Investment
|
60% |
|
E) |
Projected
amount of Profit on total investment |
|
Rs.
120 |
F) |
Allocation
of Projected Profit in mutually agreed profit
sharing
|
|
|
|
|
|
|
|
Ratio
of: |
|
|
|
Client
|
70% |
Rs.
84 |
|
Institution |
30% |
Rs.
36 |
|
|
|
Rs.
120 |
G)
|
Quarterly
provisional payment of projected Profit 36/4
= Rs. 9 per quarter |
|
|
H) |
Allocation
of actual net profit of Rs. 160 on year end: |
|
|
|
Client
|
|
Rs.
112 |
|
Institution |
|
Rs.
48 |
| |
|
|
Rs.
160 |
I) |
Therefore,
final net payment to the Institution will
be Rs. 12 (Rs. 48 - Rs. 36) |
|
|