Fargo Memorial Hospital has annual net patient service revenues of $136,005. It has two major third-party payers, and some of its patients are self-payers. The hospitals patient accounts manager estimates that 11 percent of the hospitals billings are paid (received by the hospital) on Day 30, 30 percent are paid on Day 60, and the remainder are paid on Day 90. (Assume 360 days per year.)

The hospital is considering a proposed electronic claims system that would result in collecting from third-party payers in 45 and 75 days, instead of in 60 and 90 days.

(The answer given was -88)

Suppose the hospitals annual cost of carrying receivables is 11 percent. If the electronic claims system costs $643 a year to lease and operate, what is the annual net benefit of the new system?