A company has $24,000 cash and spends $8,000 per week more than it collects. How many weeks before cash reaches zero?
Correct Answer
C) 3 weeks.
Cash runway is cash divided by weekly burn: $24,000 / $8,000 = 3 weeks.
Why This Is the Correct Answer
Cash runway is cash divided by weekly burn: $24,000 / $8,000 = 3 weeks.
Why the Other Options Are Wrong
Option A: 2 weeks.
2 weeks comes up a week short; 2 x 8,000 covers only 16,000 of the 24,000. The correct calculation is 24,000 / 8,000 = 3.
Option B: 0.33 weeks.
0.33 weeks divides the weekly burn by the cash (8,000 / 24,000), inverting the ratio. The correct calculation is 24,000 / 8,000 = 3.
Option D: 4 weeks.
4 weeks overstates the runway; after 3 weeks of $8,000 burn the $24,000 is gone. The correct calculation is 24,000 / 8,000 = 3.
Reference Hint
Study anchor (closed-book): memorize Cash runway calculation from CSLB Law and Business Study Guide; CSLB 2026 Law Book / CSLB Law and Business Study Guide Business Finances; know the rule or calculation trigger without relying on exam-room lookup.
Independent practice; verify any reference hint against the edition and category permitted for your booking. Official exam and reference-list sources →
More Law & Business Questions
A contractor pays workers through a payment app but does not issue itemized pay statements. What is missing?
Apply California’s standard overtime rules, with no alternative-workweek or other exception. A nonexempt worker at a regular rate of $36 per hour works 15 hours in one day. What is the day's gross pay, ignoring weekly overtime?
A supplier delivers special-order windows to the site, but the contract does not list when material payments are due. What should be checked?
A site checklist requires 31 separate SDS records, one for each listed product. It contains 27 valid records corresponding to 27 different listed products, with no duplicates or shared SDS entries. How many required records are missing?
In the bathroom addition file, cash is $28,000, receivables are $44,000, inventory is $16,000, and current liabilities are $60,000. What is the quick ratio?
A worker requests their own payroll records, but the company says only managers may see them. What should be reviewed?
Special-order cabinets are stored at the supplier, but the contract only pays for materials delivered to the job. What should be checked?
A contractor is unsure whether a publicly funded building upgrade is public work. What is the best first step?
A contractor's workers' compensation certificate lists the policy number but omits effective and expiration dates. What is the problem?
A jobsite stores flammable liquid next to ignition sources and exits. What is the best correction?