28.14 Anthony Marino, CFO of Thousand Years Inc., is evaluating two alternatives of float management: lockbox and concentration banking. The average number of daily payments to lockboxes is 250 with the average size of each payment at $7,500. The lockbox system can reduce the collection float by 1.5 days and concentration banking can reduce the collection float by 1 day. However, the bank charges an annual fee of

$30,000 and $0.30 per check processed for the lockbox service. Which method is more economical for Thousand Years, the lockbox system or the concentration-banking system? Assume daily interest on Treasury bills is 0.03 percent.