Collegiate Tuxedo Rents Apparel Throughout the Year

question 34

Multiple Choice

Collegiate Tuxedo rents apparel throughout the year. They have experienced non-payment by about 15% of their customers with an average loss of $200. Collegiate wants to stem their losses by using an instant electronic credit check on the customer. These checks will cost them $7 on each of the 1,000 customers. The opportunity cost is 1.5% for the credit period. Should they pursue the credit check?

• A) No, because the $7000 cost is too high.
• B) No, because a $200 loss is minor.
• C) Yes, because the net gain is $30,000.
• D) Yes, because the net gain is $23,000.
• E) Yes, because the net gain is $193,000.

---

Definitions:

Doubt

A feeling of uncertainty or lack of conviction.

Will

The mental faculty by which an individual decides or chooses between different courses of action.

Existential Import

The implication that a statement has concerning the existence of the subjects it mentions.

Categorical Syllogism

A categorical syllogism is a type of deductive argument consisting of three categorical propositions that involve a set of three terms, leading to a conclusion based on logical relationships.