cost-plus financing


cost-plus financing
murabaha arrangements are commodity trading arrangements for financial institutions. The financial institution buys an asset from a supplier and then sells it to a customer at an agreed price that is higher than the purchase price. The sale price is fixed earlier between the financial institution and the customer and may be payable immediately or may be deferred for payment at a later date. The arrangement is not contrary to Sharia because by taking the title to the asset, the financial institution takes on a risk and is therefore entitled to a profit.
Related links

Practical Law Dictionary. Glossary of UK, US and international legal terms. . 2010.

Look at other dictionaries:

  • Cost of capital — The cost of capital is a term used in the field of financial investment to refer to the cost of a company s funds (both debt and equity), or, from an investor s point of view the shareholder s required return on a portfolio of all the company s… …   Wikipedia

  • Gateway Plus — The Gateway Plus (previously known as Birmingham Gateway) project is a redevelopment scheme to regenerate Birmingham New Street Station and the Pallasades Shopping Centre above it in Birmingham, England. The project aims to enhance the station to …   Wikipedia

  • murabaha — (cost plus financing) murabaha arrangements are commodity trading arrangements for financial institutions. The financial institution buys an asset from a supplier and then sells it to a customer at an agreed price that is higher than the purchase …   Law dictionary

  • Islamic finance — bai al inah bai salam (forward financing) HM Revenue & Customs (HMRC) ijara …   Law dictionary

  • Tom Winsor — (born December 7 1957) is a British lawyer and economic regulatory professional who was, from July 5 1999 until July 4 2004, the Rail Regulator and International Rail Regulator for Great Britain. Legal career Tom Winsor was born in Broughty Ferry …   Wikipedia

  • Murabaha — Cost plus profit financing. The Murabaha technique is used extensively to facilitate the trade finance activities of Islamic financial institutions. The financial institution purchases and takes title to the necessary equipment or goods from a… …   Financial and business terms

  • government budget — Forecast of governmental expenditures and revenues for the ensuing fiscal year. In modern industrial economies, the budget is the key instrument for the execution of government economic policies. Because government budgets may promote or retard… …   Universalium

  • Capital structure — Gearing ratio redirects here. For the mechanical concept, see gear ratio. Finance Financial markets …   Wikipedia

  • Net present value — In finance, the net present value (NPV) or net present worth (NPW)[1] of a time series of cash flows, both incoming and outgoing, is defined as the sum of the present values (PVs) of the individual cash flows of the same entity. In the case when… …   Wikipedia

  • Islamic banking — Banking A series on Financial services …   Wikipedia