HGC has a central billing system and on average, takes 5 days from the time customers mail in payments until HGC receive, process and deposit them. HGC would like to set up a lockbox collection system which estimate would reduce the time lag from customers mailing to deposit to by 3 days - bringing it down to 2 days. HGC receives $1,400,000 a day.

a) how much free cash would HGC generate if it implements the lockbox system?

b) IF HGC has opportunity cost of 10%, how much is the lockbox system worth at an annual basis?

c) what is the maximum monthly charge HGC should pay for the lockbox system?