Before you finalise a recommendation, list every limit in the case and test the recommendation against each, with a figure. One failed limit sends you back to adjust the plan.
This lesson closes finance decisions in an original case. It builds on evaluating financing trade-offs.
How does the checklist work?
Write each constraint on its own line with a pass or fail and a figure. The list takes a minute and catches errors that a fast read misses.
- Find each limit in the case.
- Calculate the figure that your recommendation produces.
- Compare the figure with the limit.
- Mark pass or fail, and repair any failure.
Worked example: Dapur Kek Nurul
The case gives four limits: borrow at most RM15 000, keep a reserve of at least RM3 000, open within 3 months, and keep monthly payments within the RM1 200 surplus. The owner has RM9 000 in savings, and the total need is RM24 000.
A student recommends: “Borrow RM15 000 at the supplied terms, and use all RM9 000 of savings.” The total is 15 000 + 9 000 = RM24 000. The loan has each monthly payment of RM492.
| Constraint | Result | Pass? |
|---|---|---|
| Borrow at most RM15 000 | RM15 000 | Yes |
| Payment within RM1 200 | RM492 | Yes |
| Open within 3 months | Funds available in month 1 | Yes |
| Reserve at least RM3 000 | 9 000 − 9 000 = RM0 | No |
The recommendation fails one test. The repair is to reduce the equipment to RM20 000 by choosing a cheaper oven: borrow RM15 000 and use RM5 000 of savings, leaving 9 000 − 5 000 = RM4 000 as a reserve, which is above RM3 000.
The mistake of meeting the amount but not the limits
The common slip is to check only that the total is covered. “RM15 000 plus RM9 000 is RM24 000, so the plan works.”
The total is one test, not the only one. Rewrite with the full check: “The plan covers RM24 000 and stays within the loan limit, but it leaves no reserve, so it fails the RM3 000 reserve condition.”
Check yourself
The owner changes the plan to borrow RM12 000 and use RM8 000 of savings for RM20 000 of equipment. The loan payment is about RM393 each month. Test the plan against the four limits.
Answer
Loan RM12 000 is below RM15 000, which passes. Payment RM393 is within RM1 200, which passes. Reserve: 9 000 − 8 000 = RM1 000, which is below RM3 000, so it fails. Timing passes.
The repair is to borrow the maximum RM15 000 and use RM5 000 of savings, which leaves RM4 000.
What to study next
Test the whole cluster in the integrated practice set. If you need to revisit how the options were compared, go back to comparing options using supplied terms.
The business case answer planner has a box for constraints. For a teacher to check your recommendations, see online one-to-one Business tuition.