Collegiate Tuxedo Opportunity Cost of Instant Electronic Checks
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?© SolutionLibrary Inc. solutionlibary.com 9836dcf9d7 https://solutionlibrary.com/business/finance/collegiate-tuxedo-opportunity-cost-of-instant-electronic-checks-7e10
...nt=1000*15%*$200=$30,000 (assume that a person passing the credit check will not default).
2. Cost of instant electronic credit ...