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Friday, 4 October 2019

Numerical on Advances against retention money- 1

A customer has approached you for finance against his retention in export contract. The export order was of $ 1 million (retention of 20%) and its turnkey project where in 25 % amount is for services. How much amount you will sanction to your customer.

 a) Max of $ 1 million
 b) Max of 0.75 million 
c) Max of 0.20 million 
d) Max of0.15 million

Solution:

EXPORT ORDER
1MN
SERVICE PORTION
25.00%
AS PER GUIDELINES NO SANCTION FOR SERVICES HENCE EXPORT ORDER FOR SANCTION .75MN







RETENTION MONEY
20.00%


.75 x 20% = 0.15mn
ANSWER IS

Retention Money Reference 

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