Anne Teak, the financial manager of a furniture manufacturer, is considering operating a lock-box system. She forecasts that 700 payments a day will be made to lock boxes with an average payment size of $3,500. The banks charge for operating the lock boxes is $0.50 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.

b. Is it worthwhile to adopt the system?