Cumulative level test: Advanced case analysis and ethical sales capstone

Check understanding, separately from reading

10 questions · 80% to pass · no timer. This longer test revisits both units in the level. These authored questions assess recognition and application of the taught distinctions, not professional qualification. You may review the lessons and retry. Repeat attempts reuse the question bank; a remembered answer is not proof of transfer to a new situation.

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Question 1

Ridge has $9,000 defined monthly available cash and $6,000 scheduled service: coverage 1.50×. If available cash drops to $5,400, coverage is 0.90×. The second numerator is below service. Neither number is an approval decision or a substitute for a dated cash forecast.

Owner: “The base ratio passes my broker’s rule; can we stop analyzing?”No. Verify the numerator, lender definition, downside and daily timing before recommending anything.Yes. One ratio universally overrides all cash-flow and contract risks.

Question 2

Tide opens Monday with $2,000 and payroll of $3,000 leaves before a customer pays Friday. Monday’s balance becomes -$1,000 before that collection. A positive Friday balance cannot retrospectively cover Monday’s gap. Verify actual settlement dates and any available, permitted buffer.

Owner: “Friday’s collection makes the whole week affordable, correct?”Yes. Only the week-end balance matters.Not if payroll leaves first and there is no verified buffer; we need the minimum dated balance.

Question 3

Assume old remaining scheduled outflow and payoff both equal $20,000. New gross $40,000, fees $2,500, old payoff $20,000: net new cash $17,500. New purchased amount $40,000 × 1.3 = $52,000. New total − old remaining − net new cash = $14,500 incremental dollar cost, with no other charges.

Owner: “The renewal gives me the whole new gross amount to use?”No. Under these assumptions only $17,500 is new usable cash.Yes. The old payoff and fees do not reduce usable cash.

Question 4

Harbor hears “no penalty,” yet its quote still includes the unpaid fixed purchased amount. Ask whether any discount is contractual, discretionary or unavailable, and whether the deadline changes the amount. Avoid inventing a legal entitlement to a rebate.

Owner: “No penalty means I only pay for the days I used the money?”Yes. All financing automatically prorates its cost by days outstanding.Not necessarily; fixed charges can remain, so we need the exact payoff terms and dated quote.

Question 5

Ridge needs a machine and recurring materials. A machine-specific term structure and a monitored working-capital line solve different problems. Combining them also changes aggregate service and collateral, so independent feasibility of each does not prove feasibility together.

Owner: “Choose whatever pays your brokerage the most.”The comparison must center your needs and risks, disclose compensation and include not proceeding.Then the highest-commission product is automatically the right recommendation.

Question 6

The same broker speaks with owners in different states about sales-based financing. A disclosure prepared for one offer and jurisdiction cannot simply be relabeled for the other. Product classification and provider roles also matter.

Owner: “Your New York sheet proves this is compliant everywhere?”Yes. A single state form replaces every state’s requirements.No. We need the current rules that apply to this transaction and each relevant role and jurisdiction.

Question 7

A fictional restaurant is behind on taxes, payroll and several advances. A delayed receivable may be one issue, but layering another debit without a viability review can compound the problem. Ask about actual cash and existing provider communication; do not direct the owner to stop paying.

Owner: “Tell me to block all debits and take another advance.”I cannot prescribe evasion or guarantee a rescue; let us pause and seek qualified legal and cash-flow advice.Block the accounts now; it automatically eliminates the obligations.

Question 8

A fictional proposal shows attractive first-week net cash, but the old debits continue and the new provider can suspend deposits after a covenant breach. The merchant still owes obligations. Test a late deposit, early suspension and a slow-sales case before calling the arrangement relief.

Owner: “The first week improves; that proves the whole plan works?”Yes. A favorable first-week net amount proves lower total cost and no exit risk.No. We need the full lifecycle, surviving balances and suspension scenarios, with independent contract review.

Question 9

Harbor: “The factor is high, I have two advances and my accountant dislikes daily payments.” A strong response acknowledges all three, asks permission to compare, and leaves open the possibility that no new financing is suitable. Do not answer only the easiest objection.

Owner: “Can you guarantee approval if I sign before the accountant calls?”No. Let us review the existing obligations and full costs with your accountant before any decision.Yes. Signing first avoids underwriting questions and locks guaranteed approval.

Question 10

Fictional Ridge wants a machine, carries an existing secured line, has seasonal receipts and is offered layered funding plus a personal HELOC. Separate machine finance from working capital, investigate lien restrictions, reject “HELOC equals business LOC,” and stress the full payment schedule. A documented pause is a successful result if evidence is insufficient.

Owner: “Which conclusion is defensible before missing records arrive?”Pick the fastest product and describe all unknown terms as standard.A conditional comparison with identified gaps and a pause on commitment, not a guaranteed product recommendation.

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