REQUIREMENT: SOLUTIONS AND EXPLANATIONS ARE NEEDED.

Receivables and Cash: Collection Float: A firm has daily cash receipts through checks. On average 150 checks are received per day while each check has an average value of P2,500. It takes an average of 3 days for the bank to clear the checks. A bank has offered to decrease the clearing period to one day for a monthly fee of P500. The bank gives an interest rate of 3% per year. Required: 5. How much would the average cash in bank balance increase by if the ABC took the bank's offer? 6. How much would ABC receive as total annual interest on the freed cash? 7. How much is the annual cost of the service? 8. What is the annual net benefit or (loss) from having this service