The Cowboy Bottling Company will generate $12 million in credit sales next year. Collection of these credit sales will occur evenly over this period. The firms employees work 270 days a year. Currently, the firms processing system ties up 4 days worth of remittance checks. A recent report from a financial consultant indicated procedures that will enable Cowboy Bottling to reduce processing float by 2 full days. If Cowboy invests the released funds to earn 6 percent, what will be the annual savings?

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