A firm is considering adopting a lockbox system which will reduce the average collections period by 3 days by reducing processing, mail and clearing float.The firm's average annual collections from credit sales is $7,300,000. The firm can earn 7% per year on any funds freed up (i.e., on permanent increase in level of cash balances). What is the net benefit of adopting the system if the monthly charge for using the system is $500?

a.$4,500

b.$1,200

c.$800

d. -$1,800

( Please explain how you got the answer so I can work on similar questions myself)