The electronics division of Anton Company has an 8.25% return on investment (ROI), which is below the company's target of 14%.
Step 1: Calculate the return on investment (ROI):
ROI = Operating income / Operating assets
In this case, the operating income is $47,000 and the operating assets are $570,000.
ROI = $47,000 / $570,000
Step 2: Perform the division to calculate the ROI:
ROI = 0.0825 or 8.25%
Therefore, the electronics division's return on investment (ROI) is 8.25%.
To calculate the ROI, we divide the operating income by the operating assets. In this case, the division's ROI is $47,000 divided by $570,000, which equals 0.0825 or 8.25%.
Therefore, the electronics division's return on investment (ROI) is 8.25%, which falls short of the target ROI of 14% set by Anton Company. This indicates that the division's performance is below the desired level of profitability based on the set investment target.
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Match the term to the example
Answer Bank:
Goods Marketing
Services Marketing
Mass Marketing
Micromarketing
Business to Business
Macromarketing
For Profit Marketing
Geographic Marketing
Business to Consumer
Nonprofit Marketing
Direct Marketing
Examples:
A company that sells office products to large corporations
Advertising for a diamond ring for Valentine’s Day
Keeping a store franchise in a certain state
Getting donations to help victims of a natural disaster
Identifying customers who want someone to help them plan which investments to purchase
Training car salespeople to identify the right car for different kinds of customers
A grocery store
Billboard advertisements you see along the freeway
Getting people to join an after school extracurricular activity
Studying the effect of advertisements that use photoshop on the self-image of young people
A company that sells furniture
Answer:
li siento no puesobhsdar las resouestav
Salma is taking university entrance exams. Because the number of students that will enter the university is limited and students with better results will be accepted in the university, the exam is competitive. Salma notices that her friend Mariam, who is sitting next to her, cheated by looking at two answers in her exam paper. She faces an ethical dilemma: should she report her friend's cheating, or let it go? If Salma uses Virtue Ethics to solve this ethical dilemma, which of the following is true? * O Salma will report Mariam's cheating if she values the virtue of fairness over loyalty O Salma will report Mariam's cheating only if she thinks Mariam will perform better than her in the exam O Salma will report Mariam's cheating if she values the virtue of loyalty over fairness O Salma will not report Mariam's cheating since she thinks Mariam will not perform better than her in the exam
If Salma uses Virtue Ethics to solve this ethical dilemma, it is true that "Salma will report Mariam's cheating if she values the virtue of fairness over loyalty" (option C).
Virtue Ethics is an approach that emphasizes the development of moral character and is based on the idea that a person who has good moral character will make moral choices. It's focused on developing virtues, such as courage, compassion, and honesty, as a way to become a better person and to create a better society.
Mariam cheated during the entrance exam, and Salma witnessed it. Salma faces an ethical dilemma since reporting her friend's cheating would violate her loyalty and friendship to Mariam. Salma must choose between what is right and what is loyal. If Salma uses Virtue Ethics to solve this ethical dilemma, it is true that Salma will report Mariam's cheating if she values the virtue of fairness over loyalty.
Answer is option C.
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a business cycle is: group of answer choices a very deep and prolonged economic downturn. a period in which output and employment are rising. a period in which output and employment are falling. a short-run alternation between economic upturns and downturns.
A business cycle is a short-run alternation between economic upturns and downturns. Thus, option 'D' is the correct option.
What is the business cycle?Economic activity goes through periods of boom and then contraction during business cycles. Both the general welfare of society and the welfare of private entities are affected by these developments. Typically, changes in a broad economic statistic, such as Real Gross Domestic Product, are examined to see how business cycles have changed over time.
Typical business cycle changes include broad upswings and downswings in a variety of macroeconomic indicators. Individual expansion/recession periods have varying lengths and intensities across time.
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to wire a stereo you will need 325 cm of speaker wire to that sell $0.15/ft. what is the price of the wire that you will need?
The price of the wire that we will need is $1.605.
Given that to wire a stereo, you will need 325 cm of speaker wire that sells for $0.15/ft. We need to find the price of the wire that we will need. Price of wire = Length of wire x Cost of 1-foot wire. From the given problem, we have the length of wire in cm. We need to convert it into feet, as the cost is given in $/ft. We know that 1 foot = 30.48 cm. Length of wire in feet = 325/30.48 = 10.66 feet ≈ 10.7 feet. Now, Price of wire = 10.7 × $0.15/ft= $1.605. Hence, the price of the wire that we will need is $1.605.
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Is zero economic profit inevitable in the long run for monopolistically competitive firms? In the long run, monopolistically competitive firms:
A. will not continue to earn a profit because monopolistically competitive firms produce identical products.
B. will not continue to earn a profit because the cost of production will rise as new firms enter the market.
C. will continue to earn profit due to barriers to new firms entering the market.
D. may continue to earn profit by instead beginning to produce a product identical to competitors.
E. may continue to earn profit by convincing consumers their products are different.
In the long run, monopolistically competitive firms may continue to earn profit by convincing consumers their products are different (option E). Monopolistically competitive firms differentiate their products through branding, packaging, and advertising.
If they are successful in convincing consumers that their products are unique, they can charge a higher price and earn economic profit. However, if new firms enter the market and also offer differentiated products, the profit margin may decrease. Therefore, monopolistically competitive firms must continually innovate and differentiate their products to maintain their economic profit in the long run. In the long run, monopolistically competitive firms may experience zero economic profit. This is because they often produce differentiated products, allowing them to continue earning profits by convincing consumers their products are different (E). However, as new firms enter the market, the cost of production may rise, making it harder for these firms to maintain profits (B). Barriers to entry (C) and producing identical products (D) are not key factors for monopolistically competitive firms. Thus, zero economic profit is not inevitable, but it is a possibility depending on market conditions and firms' abilities to differentiate their products.
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Desai Industries is analyzing an average-risk project, and the following data have been developed. Unit sales will be constant, but the sales price should increase with inflation. Fixed costs will also be constant, but variable costs should rise with inflation. The project should last for 3 years. Under the new tax law, the equipment used in the project is eligible for 100% bonus depreciation, so it will be fully depreciated at t = 0. At the end of the project's life, the equipment would have no salvage value. No change in net operating working capital (NOWC) would be required for the project. This is just one of many projects for the firm, so any losses on this project can be used to offset gains on other firm projects. What is the project's expected NPV? Do not round the intermediate calculations and round the final answer to the nearest whole number. 10.09 $200,000 51,000 $25.00 WACC Equpiment cost Units sold Average price per unit, Year 1 Fixed op. costs (constant) Variable op. cost/unit, Year 1 Expected annual inflation rate Tax rate O a. 578,260 O b. $169,707 $150,000 $19,40 5.0096 25.096 O c. $128,260 O d. $155,635 O e. $119,707
Answer: $128,260.
Desai Industries is analyzing an average-risk project to calculate the project's expected NPV. The project will last for 3 years. The expected annual inflation rate is 5.0096%. The WACC, equipment cost, units sold, average price per unit, year 1 fixed op. costs (constant), variable op. cost/unit, and tax rate are 10.09%, $150,000, 51,000, $25.00, $200,000, $19.40, and 25.096%, respectively. The equipment used in the project is eligible for 100% bonus depreciation, so it will be fully depreciated at t = 0. The project's expected NPV is $128,260.
Net present value (NPV) is the difference between the present value of future cash flows and the initial investment. The NPV rule is used to evaluate investment opportunities that require an initial cash outflow. NPV is calculated as the sum of the present value of future cash flows minus the initial investment. The formula for calculating NPV is :NPV = (Cash flow1 / (1 + r)^1) + (Cash flow2 / (1 + r)^2) + ... + (Cash flown / (1 + r)^n) - Initial investment Where r is the discount rate.
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you are considering buying a new house, and have found that a $100,000, 30-year fixed-rate mortgage is available with an interest rate of 7 percent. this mortgage requires 360 monthly payments of approximately $651 each. if the interest rate rises to 8 percent, what will happen to your monthly payment?
if the interest rate rises to 8 percent, PV=c/(1+i)∧n
=$100,000(1+8%)∧30=0.000034 will happen to your monthly payment.
The interest rate has been referred to as an indicator of the preference for a dollar in the present over a dollar in the future. The borrower is prepared to go to any lengths to obtain. The amount of interest that is computed as a percentage of the amount lent, deposited, or borrowed and is due each period is known as the interest rate. The final amount of interest charged on a money lent or borrowed depends on a number of variables, including the principal, interest rate, frequency of compounding, and term of the loan, deposit, or borrowing. The interest rate that is determined over a year is the annual interest rate.
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There are a number of good outcomes associated with international trade for an economy in addition to the positive welfare effects from free trac Consider the following situation: Without free trade, Cardinalia has market power as a local producer. Once free trade is implemented in the Iocal economy, Cardinalia is no longer able to raise its prices above competitive levels. The scenario described above represents which of the following benefits of free trade? A. Increased variety of goods B. Lower costs through economies of scale
C. Increased competition D. An enhanced flow of ideas
The scenario described above represents C. Increased competition. With free trade, Cardinalia is no longer able to raise its prices above competitive levels, meaning that there is an increase in competition from other suppliers. Free trade encourages competition, which often results in lower prices, an increased variety of goods, economies of scale, and an enhanced flow of ideas.
Free trade leads to increased competition, as well as increased choice for consumers, by allowing firms to have access to global markets. Free trade contributes to lower prices and allows companies to specialize in their core competencies, resulting in increased efficiency and lower costs. Countries can gain from free trade by specializing in producing those goods that they have a comparative advantage in and importing goods that other countries are better at producing.
Free trade results in greater competition among producers, which encourages innovation and improves the quality of products while lowering their prices. In the absence of trade restrictions, the domestic market becomes more open to foreign goods, and domestic producers are forced to improve their products' quality and reduce their prices to remain competitive.
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clay offers to pay dot $50 for a golf lesson for erin. they agree to meet the day after tomorrow to exchange the cash for the lesson. these parties have
The parties offering to pay $50 for a golf lesson for Erin and agreeing to meet the day after tomorrow to exchange the cash for the lesson are known as the "contracting parties."
In legal terms, a "contracting party" refers to the parties that are bound by a legal agreement. In the given scenario, Clay and Erin are the contracting parties since they are the ones who have entered into a contract for a golf lesson.
A contract is a legal agreement between two or more parties that is enforceable by law. It is an agreement in which both parties agree to do something or to refrain from doing something. The terms of the contract must be clearly defined, and both parties must agree to them.
In this case, Clay has agreed to pay Erin $50 for a golf lesson, and Erin has agreed to teach Clay golf.
In conclusion, the contracting parties in the given scenario are Clay and Erin, who have entered into a contract for a golf lesson. The agreement between the two parties is legally binding and can be enforced by law.
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Which option should be used to commit a record in an Access table?
Press Esc.
Select Undo.
Press Ctrl+Z.
Move to a new record.
EDGE
Answer:
D)Move to a new record.
Explanation:
this is what I narrowed it sown to
edg 2021
Answer:
the answer is D
Explanation:
edge 2022
Choose the best answer to the following question. Explain your reasoning with one or more complete sentences.
in the above case, "It's a good idea to refinance the loan if it lowers your monthly payment by at least $100. The costs of refinancing can be high, so it's not worth it if the monthly payment won't change by a lot." (Option E)
What is the rationale for the above response?Refinancing would reset the loan term to 15 years." Refinancing a student loan may be a good idea if the closing costs are minimal and the monthly payment will decrease significantly, but it is important to consider the remaining years in the current loan term and the cost of refinancing.
Note, however, that a shorter loan term may result in higher monthly payments, but also a quicker pay-off and lower total interest paid over the life of the loan.
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What is the relationship between interest rates and aggregate spending?
A.
when interest rates increase, aggregate spending also increases
B.
when interest rates increase, aggregate spending decreases
OC. they do not have any relation
OD
both the factors are affected favorably by any external factor
O E.
both the factors are affected adversely by any external factor
Answer:
B. when interest rates increase, aggregate spending decreases
Explanation:
Interest rates and aggregate spending have an inverse relationship. An increase in interest rates results in a decrease in aggregate expenditure. Interest refers to the cost of money, while aggregate spending is the total consumption in the economy.
When the cost of money is high, firms and households will stop borrowing, which reduces spending. It means businesses will not expand, and domestic consumption reduces. The net effect is a lower demand for goods and services, resulting in lower aggregate spending.
Answer:
when interest rates increase, aggregate spending decreases
Explanation:
I just took the test, good luck everyone
(ANSWERED) Which of the following techniques can be used to evaluate a job candidate's qualifications?
done
A.
Call and talk with the applicant's references.
B.
Evaluate applicant's private correspondence.
close
C.
Observe the applicant in his or her present job situation.
D.
Call and talk with applicants' friends and family.
ANSWER: A - Call and talk with the applicant's references.
Explanation:
.
Evaluate applicant's private correspondence.
close
what is the collateral in the contract? based on the collateral section, when will the collateral be collected by the lender?
Collateral in a contract refers to the assets or properties that the borrower pledges to the lender in the event of default.
It serves as a form of security for the lender, providing them with the assurance that they will be able to recover their money in case the borrower is unable to make payments. The collateral is usually listed in the loan agreement and can include real estate, vehicles, equipment, inventory, or any other valuable asset. The lender will have a lien on the collateral, which gives them the right to take possession of it in case the borrower is unable to repay the loan.When the collateral will be collected by the lender depends on the terms of the contract. If the borrower fails to make payments on the loan, the lender can initiate the process of seizing the collateral.
However, this process may vary depending on the type of collateral and the state laws governing the contract.In some cases, the lender may not collect the collateral right away but may instead choose to work with the borrower to come up with a repayment plan. If the borrower is able to make payments on time and fulfill their obligations under the contract, the collateral will not be collected. However, if the borrower continues to default on the loan, the lender may ultimately seize the collateral to recover their losses.
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How do I know when I need to start doing taxes?
Answer:
when you start working a regular job
Explanation:
Answer:
When you start working
Explanation:
answer the question under the picture
Answer:
Explanation:
The non-voters, when looked at as a group, outweigh the voters. That means that a minority of people decide the policies for the majority -- and for themselves. The non-voters don't have that luxury. They must live with what they had no part in deciding.
9. If $1.00 at 5.5%interest compounded daily
has a value of $1.00513 after 34 days, how
much interest would June Akin's account
have earned on $5,000.00 after 34 days?
(Step by step) please
Answer:
After 34 days, Akin's bank account would have $5,034.11
Explanation:
Given that 5.5% annual interest, if compounded daily, represents a daily interest of 0.015%, to determine the total amount that Akin's account will have if its initial amount were $ 5,000 after 34 days of investment, the following must be done calculation:
X = 5,000 x (1 + 0.015) 34
X = 5,034.11
Therefore, after 34 days, Akin's bank account would have $5,034.11.
A broker may be entitled to a commission in the event that the sale does not close if the problem was caused by the
a. Seller.
b. Buyer.
c. Bank.
d. Title Company.
Whether a broker is entitled to a commission in the event that the sale does not close depends on the terms of the listing agreement or buyer representation agreement, as well as the cause of the failure to close. Therefore, the correct option is b. Buyer.
In some cases, the agreement may include a provision that entitles the broker to a commission if the transaction fails to close for certain reasons, such as the buyer's failure to obtain financing or the seller's refusal to perform under the contract.
Generally, if the sale fails to close due to the fault of the seller, such as a breach of contract or failure to provide clear title, the broker may still be entitled to a commission.
However, if the sale fails to close due to the fault of the buyer, such as a failure to obtain financing or a change of heart, the broker may not be entitled to a commission. The same would apply to issues caused by the bank or the title company - it ultimately depends on the specific circumstances and the terms of the agreement.
Therefore, the correct option is b. Buyer.
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31.4X R. James drew up the following statement of financial position on 31 December 2017. Statement of Financial Position of R. James as at 31 December 2017 $ Non-current assets Furniture and fittings Motor vehicles Current assets Inventory Accounts receivable Cash at bank Less Current liabilities Accounts payable Net current assets Capital 1 January 2017 ⁸0 7,870 When checking the books, the following errors and omissions were found. (i) A purchase of fittings, $140, had been included in the ******ebook converter DEMO Watermarks******* purchases account. (ii) Motor vehicles should have been depreciated by $280. (iii) A debt of $41 included in accounts receivable was Required: (a) show your calculation of the correct net profit (b) draw up a corrected statement of affairs as at 31 December 2017.
(a) the corrected net profit is: Capital 1 January 2017 + Net current assets - Non-current assets = $7,870 + ($0 - $140) - $7,590 = $140 b) Total capital $8,010
a) To calculate the correct net profit, we need to adjust for the errors and omissions found. Firstly, the purchase of fittings that was included in the purchases account should have been included in the furniture and fittings non-current asset account.
Therefore, we need to deduct $140 from the purchases account and add it to the furniture and fittings account. Secondly, the motor vehicles should have been depreciated by $280, which means we need to reduce the value of the motor vehicles account by $280. Finally, the debt of $41 that was included in accounts receivable was not paid, so we need to deduct it from the accounts receivable account.
So, the adjusted statement of financial position is:
Non-current assets:
Furniture and fittings $140
Motor vehicles $7,590 (original value of $7,870 - $280 depreciation)
Current assets:
Inventory
Accounts receivable $0 (original value of $41 - $41 debt)
Cash at bank
Less Current liabilities:
Accounts payable
Net current assets:
Capital 1 January 2017
Therefore, the corrected net profit is:
Capital 1 January 2017 + Net current assets - Non-current assets = $7,870 + ($0 - $140) - $7,590 = $140
(b) The corrected statement of affairs as at 31 December 2017 is:
Non-current assets:
Furniture and fittings $140
Motor vehicles $7,590
Current assets:
Inventory
Accounts receivable $0
Cash at bank
Less Current liabilities:
Accounts payable
Net current assets: $0
Capital 1 January 2017 $7,870
Add: Corrected net profit $140
Total capital $8,010
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boyer industries has fixed costs of $600,000 and variable costs are 60% of sales. how much sales revenue will boyer report when its net income equals $60,000?
The sales revenue required to report a net income of $60,000 is $900,000
How did we get the values?To find the sales revenue, we need to equate the net income to the profit, which is equal to total revenue minus total costs (fixed and variable).
Profit = Total revenue - Total costs
Total costs = Fixed costs + Variable costs
Substitute the given values into the equations:
$60,000 = Total revenue - ($600,000 + 0.6 * Total revenue)
Expanding the variable costs term:
$60,000 = Total revenue - $600,000 - 0.6 * Total revenue
Rearranging the equation:
$60,000 + 0.6 * Total revenue = Total revenue - $600,000
0.4 * Total revenue = Total revenue - $600,000 + $60,000
0.4 * Total revenue = Total revenue - $540,000
0.6 * Total revenue = $540,000
Total revenue = $540,000 / 0.6
Total revenue = $900,000
So, the sales revenue required to report a net income of $60,000 is $900,000.
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each point on a ________ curve shows the willingness of consumers to purchase a product at different prices.
Answer:
demand is the word.
Explanation:
Each point on a demand curve shows: The willingness of consumers to purchase a product at different prices. The consumer surplus received from purchasing a given quantity of a product The economics surplus received from purchasing a given quantity of a product The legally determined maximum price that sellers may charge for a given quantity of product.
6. He is not a skilled worker. He
doesn't ............... much.
win
gain
earn
pay
afford
Answer:
earn .
He is not a skilled worker. He doesn't earn much.
Explanation:
He doesn't earn much.....
What is the FIRE movement?
Answer:
The FIRE movement is a lifestyle movement with the goal of gaining financial independence and retiring early.
Given the following information, prepare the mps using a fixed order quantity (foq) of 90 and calculate the projected available inventory balances. What is the projected available inventory balance at the end of period 3?
The projected available inventory balance at the end of period 3 is 120 units.
To prepare the MPS (Master Production Schedule) using a fixed order quantity (FOQ) of 90, we need to first determine the net requirements and planned order releases for each period. The net requirements are the difference between the gross requirements and the projected available inventory balance from the previous period.
Assuming the following information: Period 1: Gross requirements = 150. Period 2: Gross requirements = 200. Period 3: Gross requirements = 100. Projected available inventory balance at the end of period 0 = 100
Using FOQ of 90, we can calculate the planned order releases as follows: Period 1: Planned order release = 180 (90*2) Projected available inventory balance at the end of period 1 = 130 (100+180-150)
Period 2: Planned order release = 210 (90*2+30)
Projected available inventory balance at the end of period 2 = 120 (130+210-200). Period 3: Planned order release = 90 (90*1). Projected available inventory balance at the end of period 3 = 120 (120+90-100)
There will be enough inventory to meet the demand for period 3, and the company can plan to order more inventory for the next period. Using FOQ helps to ensure that the company maintains a consistent inventory level and avoids stockouts or overstocking.
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Consider a second hand car market where three types of cars are being sold: High quality (H), medium quality (M) and low quality (L). Sellers value an H at $2000, an M at $1200 and an L at $800, whereas buyers value an H at $1800, an M at $1600 and an L at $1400. As discussed in the "Akerloff's Lemons Market", sellers are able to distinguish between different quality cars but buyers are not and a buyer believes that in this market 40% of the cars is an H, 30% of the cars is an M and 30% of the cars is an L. a) Determine which type of cars will be sold at the efficient allocation. b) Determine which type of cars will be sold at the market equilibrium.
Answer:
a) Determine which type of cars will be sold at the efficient allocation.
All cars would be sold in a Pareto efficient allocation.
In a Pareto efficient market, resources are all allocated in teh most efficient possible way. This is the reason why this is just a theoretical concept that does not necessarily apply in real life.
b) Determine which type of cars will be sold at the market equilibrium.
Since consumers are only willing to pay up to $1,620 for a used car, only medium quality and low quality cars will be sold. The price of high quality used cars is higher than the equilibrium price.
Explanation:
the most a buyer would be willing to pay for a used car is ($1,800 x 40%) + ($1,600 x 30%) + ($1,400 x 30%) = $720 + $480 + $420 = $1,620
What is a Legal tender plsss
Answer:
Legal tender is something which is acknowledged by the laws as a mechanism to settle a private or public debt or in order to meet a fiscal responsibility which includes paying taxes, abiding by contracts, and finally damages or fines. Almost every country uses its national currency as legal tender.
Creditors are lawfully responsible for accepting legal tender for the repayment of debt that they have availed.
Help on this question please
which of the following industries has the highest concentration ratio? a. household laundry equipment b. fruit c. jeans d. restaurants
The industry with the highest concentration ratio among the given options is likely to be restaurants (option d).
Concentration ratio refers to the share of market sales that is controlled by the largest firms in an industry. In the case of restaurants, there are several large chains such as McDonald's, Subway, and Burger King that have a significant presence in the market.
This means that a large percentage of restaurant sales are controlled by a relatively small number of firms, leading to a high concentration ratio. In contrast, industries such as household laundry equipment and fruit may have a larger number of smaller players, leading to a lower concentration ratio. Jeans may have a moderate concentration ratio due to the presence of large brands such as Levi's and Wrangler. The correct option is d.
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What are some exceptions to the federal minimum wage?
Answer:
Explanation:
It keeps the states from setting the minimum wage at less than that amount. States can choose to set their state minimum at a higher amount, but not a lower amount.
Often states with a higher minimum wage, set it higher because the cost of living is higher in some states than others. If the cost of living is the same or lower than the federal, the states often do not pay more than the federal amount.
Answer:
There are many exceptions to the federal minimum wage, each pertaining to a different area including, but not limited to, State Laws (which typically have their own legislations), Workers with Disabilities, Youth workers, Tipped workers (servers, hosts, etc.), among many others.
Explanation:
Check out the article found at the link below to find a more thorough explanation of each of the exceptions I mentioned, and more. I am not sure of the age of the article, but all of the information I was able to see was still relevant.
https://work.chron.com/exceptions-minimum-wage-laws-19497.html
Good luck in your studies!
Assuming no transaction costs, Barclays Bank quotes Australian dollar (A$) per pound sterling (£) = A$1.90/£, Suisse Bank quotes euros (€) per pound sterling (£) = €1.53/£ and ANZ quotes Australian dollar (A$) per euros (€) = A$1.25/€, do you detect any arbitrage opportunities here? If so, how could you (i.e., which ways) take profitable advantage of these rates? And what will be your arbitrage gains, if any (use a hypothetical investment amount of Australian dollar ten million)? (Must show your workings).
Yes, an arbitrage opportunity exists. By converting currencies through the following steps: Pound (£) to Euros (€) through Suisse Bank, Euros (€) to Australian dollars (A$) through ANZ Bank, and finally Australian dollars (A$) back to Pound (£) through Barclays Bank, a profit can be made.
1. Convert Pound (£) to Euros (€) at Suisse Bank: £1 → €1.532. Convert Euros (€) to Australian dollars (A$) at ANZ Bank: €1 → A$1.25
3. Convert Australian dollars (A$) back to Pound (£) at Barclays Bank: A$1 → £1.90
Hypothetical investment amount: A$10,000,000
Calculations:Step 1: Convert A$10,000,000 to Euros (€) at ANZ Bank
A$10,000,000 ÷ A$1.25/€ = €8,000,000
Step 2: Convert Euros (€) to Pound (£) at Suisse Bank€8,000,000 ÷ €1.53/£ = £5,229,949.48
Step 3: Convert Pound (£) back to Australian dollars (A$) at Barclays Bank
£5,229,949.48 × A$1.90/£ = A$9,936,903.02
Arbitrage gain:A$9,936,903.02 - A$10,000,000 = -A$63,096.98 (Loss)
In this hypothetical scenario, arbitrage trading would result in a loss of approximately A$63,096.98. It is important to note that this calculation assumes no transaction costs, which are typically involved in real-world trading. Additionally, currency exchange rates are subject to fluctuations, so timely execution is crucial in arbitrage trading.
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