28.8 Garden Groves, Inc., a Florida-based company, has determined that a majority of its customers are located in the New York City area. Therefore, it is considering using a lockbox system offered by a bank located in New York. The bank has estimated that use of the system will reduce collection float by three days. Based on the following information, should the lockbox system be adopted?

Average number of payments per day: 150 Average value of payment: $15,000 Fixed annual lockbox fee: $80,000 Variable lockbox fee: $0.50/transaction Annual interest rate on money-market securities: 7.5 percent