10 · Capstone check: prove you can read the numbers

1. A business made $300 in revenue and spent $180. What's its profit, and what does revenue NOT tell you?

Profit is $300; revenue already includes costsProfit is $120 (revenue − costs); revenue alone doesn't tell you what's left after expensesProfit is $480; you add revenue and costsThere's no way to know without AI

2. Why can a profitable business still run out of money?

Profit and cash are the same thingBecause cash flow is about TIMING — money can be owed to you later than your bills are dueBecause profit isn't realIt can't; profit guarantees cash

3. An AI tidies your expenses and reports a monthly total. What should you do?

Trust it — AI is good at mathRe-add the totals yourself (or in the spreadsheet); AI text predictors can be confidently wrong on arithmeticDelete your receipts since the AI organized itPaste in your full bank account number so it can double-check

4. You spent $50 on ads and got 10 new customers. What is your CAC, and what should you compare it to?

CAC is $50; compare it to your follower countCAC is $5 ($50 ÷ 10); compare it to LTV — the value of a customer must beat the cost to get oneCAC is $500; compare it to revenue onlyCAC can't be calculated without AI

5. Which is a VANITY metric rather than a real one?

Customers who actually paidConversion rate (visitors who became buyers)Total follower countCash on hand

6. You ask AI to 'project my first year' and it gives a polished forecast. What's the main danger?

It's always too pessimisticIt can invent optimistic assumptions and make math errors — the made-up inputs, not reality, drive the forecastProjections are illegalNothing; AI knows your customers

7. Fixed costs are $120/month and your unit margin is $9. What's your break-even in units?

About 14 units ($120 ÷ $9 ≈ 13.3, so you must sell 14 to cover costs)About 9 unitsAbout 120 unitsYou can't break even with those numbers

8. If your unit costs $6 to make and you price it at $5, what happens as you sell more?

You make more profit the more you sellYou lose money on every sale, and selling more makes the loss biggerYou break even instantlyVolume fixes a negative margin

9. You get an urgent invoice demanding payment by gift card for something you don't remember ordering. What's the right move?

Pay immediately so you don't miss the deadlineSlow down, verify through a known channel that you actually ordered it, don't pay, and report the scam to the FTCClick the link to see the detailsAsk the AI in the email to confirm it's legitimate

10. A chatbot confidently answers your business-tax question. How should you treat it?

As final — 'the chatbot told me' is a valid defense to the IRSAs possibly wrong or out of date; use AI to learn vocabulary, but keep good records and rely on a qualified human for real tax decisionsIgnore taxes until you're bigTrust it because it sounded sure