A $7,200 flooring and baseboard home improvement contract is signed in the owner's kitchen. What is the maximum down payment?
Correct Answer
A) $720.
Ten percent of $7,200 is $720, and $720 is less than the $1,000 cap.
Why This Is the Correct Answer
Ten percent of $7,200 is $720, and $720 is less than the $1,000 cap.
Why the Other Options Are Wrong
Option B: $500.
$500. is below the supported result for project contracts; it likely omits part of the approved scope, cap, credit, or holdback.
Option C: $576.
$576. is below the supported result for project contracts; it likely omits part of the approved scope, cap, credit, or holdback.
Option D: $5,720.
$5,720. is above the supported result for project contracts; it likely adds scope or money the rule does not allow.
Memory Technique
Training New contract math: approved scope is the ruler for project contracts.
Reference Hint
Study anchor (closed-book): memorize Project contracts from CSLB 2026 Law Book; CSLB Home Improvement Contracts / Business and Professions Code Section 7159; know the rule or calculation trigger without relying on exam-room lookup.
More Law & Business Questions
A Fresno homeowner wants a $725 cabinet repair and trim adjustment. Which contract step best matches CA home improvement requirements?
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A balance sheet lists assets of $310,000 and liabilities of $185,000. What is owner's equity?
A job is estimated to cost $135,000. What price gives a 25 percent gross margin?
A customer invoice of $4,000 has a stated late charge of 1.5 percent. What late charge is added?
A bid has direct labor of $18,000, materials of $12,500, and equipment rental of $3,500. If the contractor adds 20 percent markup on direct cost, what is the bid price?
A contractor wants a 25 percent gross margin on a job with estimated cost of $60,000. What selling price gives that margin?
A completed project sold for $150,000 and had total cost of $126,000. What gross margin percentage did the project earn?