A contractor bids $45,000 for a kitchen remodel but the final cost is $52,000 due to change orders. What is the maximum finance charge the contractor can collect if offering payment terms?
Correct Answer
C) $780
B&P Code Section 7159.10 limits finance charges to 1.5% per month on the unpaid balance. Maximum annual rate is 18%, so 1.5% of $52,000 = $780 per month maximum.
Why This Is the Correct Answer
B&P Code Section 7159.10 limits finance charges to 1.5% per month on the unpaid balance. Maximum annual rate is 18%, so 1.5% of $52,000 = $780 per month maximum.
More ca-license-law Questions
A Class C-10 electrical contractor has annual gross receipts of $3.2 million. What is the required bond amount under current California law?
Under B&P Code Section 7125.4, what is the fee for initial Home Improvement Salesperson registration?
According to B&P Code Section 7125, what is the maximum penalty the CSLB can impose for contracting without a license?
A home improvement contract for $8,500 requires a 3-day right to cancel notice. The contract is signed on Tuesday at 2 PM. When does the cancellation period expire?
A contractor employs 15 workers across multiple job sites. The total annual payroll is $850,000 with a workers' comp rate of 4.1%. If they self-insure with a deposit requirement of 125% of estimated annual premium, what deposit is required?
A C-10 electrical contractor wants to perform plumbing work valued at $8,000 as part of a larger electrical project. Is this permissible under CSLB regulations?
A homeowner discovers that an unlicensed contractor performed $25,000 worth of work on their property. Under B&P Code Section 7031, what remedy is available to the homeowner?
A Class B general building contractor wants to perform electrical work valued at $750. According to the B&P Code, this contractor:
A contractor's qualifying individual leaves the company. How many days does the contractor have to replace them before the license becomes invalid?
According to B&P Code Section 7031, what happens to a contractor's right to payment if they perform work while unlicensed?
People Also Study
Business & Financial Management
120 questions · 70% to pass
Contract Administration
60 questions · 70% to pass
Project Management
60 questions · 70% to pass
Related Study Resources
Previous Question
A contractor completes a $125,000 home improvement project. The homeowner discovers defective work 8 months later. What is the contractor's obligation under the Home Improvement Contract law?
Next Question
A Class C contractor has been cited for performing work outside their license classification. According to B&P Code Section 7028, what is the maximum penalty for this first offense?