Question

the paragraph below comes from the rental agreement susan signed when she opened her account at super video.
\all rentals are due back by midnight of the due date as printed on the transaction receipt. any rental not received by midnight on the day it is due is subject to a late charge of \\$1.50 for each day it is late. any rental not returned by the fifth day after the due date will be transferred to a sale. the customer will then be required to pay the purchase price of the item in addition to five (5) days of late fees. the customer will not be required to return the product once the total balance is paid.\

as of today, susans movie is currently five days late. she knows that if she doesnt get the movie back tonight, she will be charged \\$9.99, the purchase price of the movie, plus five days worth of late fees. a round trip cab ride to the video store will cost about \\$10.
which of the following statements is true?

a. taking a cab to return the movie is the cheapest action.
b. keeping the movie is cheaper than taking a cab to return it.
c. it would cost more to keep the movie then to return the movie.
d. if susan returns the movie, she would not have to pay late fees.

Explanation:

Analyze the cost of returning the movie

Using the Rental Agreement Terms knowledge point

• Late fee per day: \(\$1.50\)
• Days late: \(5\) days
• Late fees accrued: \(5 \times \$1.50 = \$7.50\)
• Cab ride cost: \(\$10.00\)
• Total cost to return: \(\$7.50 + \$10.00 = \$17.50\)

Analyze the cost of keeping the movie

Using the Rental Agreement Terms knowledge point

• Purchase price: \(\$9.99\)
• Late fees (5 days): \(5 \times \$1.50 = \$7.50\)
• Total cost to keep: \(\$9.99 + \$7.50 = \$17.49\)

Compare the options and evaluate statements

Using the Rental Agreement Terms knowledge point

• Cost to return: \(\$17.50\)
• Cost to keep: \(\$17.49\)
• Keeping the movie is cheaper than taking a cab to return it (\(\$17.49 < \$17.50\)).

Answer:

• a. Taking a cab to return the movie is the cheapest action.
• b. Keeping the movie is cheaper than taking a cab to return it. (Correct answer)
• c. It would cost more to keep the movie then to return the movie.
• d. If Susan returns the movie, she would not have to pay late fees.