Collegiate Tuxedo Rents Apparel Throughout the Year

question 15

Multiple Choice

Collegiate Tuxedo rents apparel throughout the year. They have experienced non-payment by about 20% of their customers with an average loss of $300. Collegiate wants to stem their losses by using an instant electronic credit check on the customer. These checks will cost them $12 on each of the 1,000 customers. The opportunity cost is 2.0% for the credit period. Should they pursue the credit check?

• A) No, because the $24,000 cost is too high.
• B) No, because a $300 loss is minor.
• C) Yes, because the net gain is $30,000.
• D) Yes, because the net gain is $48,000.
• E) Yes, because the net gain is $60,000.

---

Definitions:

Basic Adjustments

Refers to the fundamental strategies or coping mechanisms that an individual employs in response to environmental demands or challenges in their life.

Fromm's

A psychological and philosophical inquiry into human freedom, love, and the art of living, introduced by psychoanalyst Erich Fromm.

Locus of Control

A psychological concept that refers to an individual's belief about the extent to which their actions can influence outcomes in their life, classified into internal and external loci of control.

Rotter's Concept

Rotter's Concept refers to the psychological theory of locus of control, which suggests that individuals attribute outcomes to internal dispositions or external circumstances.