The financial manager of JAC Cosmetics is considering opening a lockbox in Pittsburgh. Checks cleared through the lockbox will amount to $25,000 per day. The lockbox will make cash available to the company two days earlier than is currently the case. Suppose that the bank offers to run the lockbox for a $38,400 compensating balance, answer the following:

a-1. Calculate the additional available cash generated by the lock-box system.

b. Suppose that the bank offers to run the lockbox for a fee of $0.25 per check cleared instead of a compensating balance. Assume an interest rate of 5% per year. What must the average check size be for the fee alternative to be less costly? Use a 365-day year. (Round your answer to the nearest whole number.)