Accounting HW (again)?

Question

A lock box will speed collections from customers and reduce float from 6 to 2 days. The average daily collection is $2million and the opportunity cost of funds is 6%. What is the annual economic benefit of the lockbox?

a. $1315
b. $240,000
c. $480,000
d. $4 million
e. $8 million

thanks!

Answer 1

i think it would be C.
daily collection is 2million, so annual collection is 2*365million,
with the lock box, each daily collection have more 4 days in bank than before.
the benefit = 2million * 4 * 6% = $480,000