Anne Teak, the financial manager of a furniture manufacturer, is considering operating a lock-box system. She forecasts that 300 payments a day will be made to lock boxes with an average payment size...

Anne Teak, the financial manager of a furniture manufacturer, is considering operating a lock-box system. She forecasts that 300 payments a day will be made to lock boxes with an average payment size of $2,000. The bank’s charge for operating the lock boxes is $0.40 a check. The interest rate is 0.011% per day.

a.If the lock box makes the cash available 2 days earlier, calculate the net daily advantage of the system.
(Do not round intermediate calculations.)

b.Is it worthwhile to adopt the system?

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  Yes

  
  

  
  
  
  


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  No

  
  

  
  
  
  

c.
What minimum reduction in the time to collect and process each check is needed to justify use of the lock-box system?
(Do not round intermediate calculations. Round your answer to 2 decimal places.)