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Peter has received a proposal from Bank of America to establish a lock-box system to accelerate the receipt of $500 million annually on 1,000,000 checks.
Peter has received a proposal from Bank of America to establish a lock-box system to accelerate the receipt of $500 million annually on 1,000,000 checks. By its own analysis, Peter believes such a system would decrease total float by 3 days. If Peter can earn 8 percent before taxes on the released funds, what is the maximum that Peter should be willing to pay the bank per check for the service?
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