A firm is evaluating whether to establish a lockbox system.
The bank will charge $30,000 per year for the lockbox and the
firm will save approximately $8,000 in internal processing costs.
The firm estimates that the float will be reduced by three days if
the lockbox system is put into place. Assuming that average daily
cash receipts are $350,000 and short-term interest rates are 4%,
what decision should the firm make regarding the lockbox system?