LK Rails is trying to improve their liquidity position and reduce their reliance on short-term loans. In order to do so, they are looking into a lockbox system being offered by their bank. The lockbox system will speed up collections by 2 days and will cost the company $100,000. If the lockbox system is implemented, however, the bank would require the company to maintain a compensating balance of $500,000 in its account. In addition to the lockbox system the company would also extend the timing of disbursements by 3 days. The company's daily remittances amount to $1.5 million, and they could earn 5% on the funds freed up. Required: Advise LK Rails whether or not they go ahead and put these changes in place? (show all calculations)