my answer keeps being incorrect where am I going wrong Anne

my answer keeps being incorrect. where am I going wrong?

Anne Teak, the financial manager of a furniture manufacturer is considering operating a lock-box system. She forecasts that 300 payments a day will be made to lock boxes with an average payment size of $2.000 The bank\'s charge for operating the lock boxes bs $0.40 a check. The interest rate is 0.011% per day. a. If the lock box makes the cash available 2 days earlier, calculate the net daily advantage of the system. (Do not round intermediate colculations.) Dalily interest saved b. Is it worthwhile to adopt the system? Yes No c. What minimum reduction in the time to colect and process each check is needed to justify use of the lock-box system? (Do not round intermediate calculations. Round your answer to 2 decimal places.) Minimum reduction in time days

Solution

a) Daily interest saved = $1,200,000*0.011% = $132

The lock box system reduces collection float by :

300*$2,000*2 = $1,200,000

b)

Yes

c)

Bank charges each day = 300*$0.40 = $120

The minumum time would be when the savings are equal to cost. We get 300 X 2000 X days X .011%=120. This gives days as 1.82. This is the minimum reduction in time to justify lock box