Unit quiz: Pricing under funding cost, renewal pressure and honest selling

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5 questions · 80% to pass · no timer. This quiz checks the lessons in this unit. 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

A merchant with $60,000 of monthly revenue argues that a $2,750 weekly remittance is negligible against turnover, and the broker repeats the point. The owner's contribution margin is 38% of revenue and fixed operating costs are $9,500 a month. What analysis settles the question?Convert the remittance into units or dollars of contribution and test coverage: $11,916.67 of monthly contribution against $11,916.67 of remittance plus $9,500 of fixed cost leaves the plan short before tax.Accept the turnover argument, because a payment under 5% of monthly revenue cannot strain operations at that volume.

Question 2

A contractor's receipts are heavy from April to September and thin from December to February. A provider offers either a 22-week fixed schedule or a 9% share-of-receipts structure, and the fixed schedule would begin in October. Which framing is correct for the owner?The share structure is clearly preferable because payments automatically fall when receipts fall, so the schedule always protects the trough.Both options should be mapped against weekly receipts to completion, because the fixed schedule concentrates $2,750 payments into the thin months while the share structure would slow and extend the obligation into the following season.

Question 3

At week 20 of a 30-week schedule an owner is offered a renewal that reduces the weekly payment from $2,400 to $2,200 but extends the obligation by sixteen weeks and consumes $22,000 of the new proceeds for payoff. What should the adviser present first?The lifecycle total across both rounds, the incremental cash the owner can actually spend, and the burden in the weeks after the new phase begins.The weekly reduction of $200 a week, since the owner's stated concern was the size of the payment.

Question 4

During a call the merchant asks, 'just tell me the annual rate, and can you guarantee I'll be approved today?' The broker knows the factor is 1.29 over 24 weeks and the application is still missing bank data. What is the honest response?Give an approximate annual rate so the merchant has a basis for comparison, and confirm that applications of this kind are usually approved quickly.Explain that the factor is a multiplier rather than a rate, offer the net proceeds, total, weekly amount and number of weeks, state the outstanding evidence, and say plainly that approval cannot be promised.

Question 5

A completed case memo shows a positive modeled machine contribution, a negative stressed cash trough, an unverified collection date and a guarantee that counsel has not yet read. The provider says the file is approved and asks for a same-day signature. What is the correct recommendation?Maintain the pause, list the specific evidence needed (collection verification, contract or deposit proof, permitted liquidity, reviewed guarantee), and commit to recalculating if those facts arrive.Proceed, because provider approval resolves the remaining uncertainty and the merchant has already invested time in the application.

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