TJ 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 $3$ days and will cost the company $$100,000.$ If the lockbox system is implemented, however, the bank would require the company to maintain a compensating balance of $$600,000$ in its account.

In addition to the lockbox system the company would also extend the timing of disbursements by $2$ days. The company$$s daily remittances amount to $$1\mathrm{.}2$ million, and they could earn $6\%$ on the funds freed up$.$

Required:

Advise TJ Rails whether or not they go ahead and put these changes in place? $($show all calculations$)$