Puddle of Mudd Corporation has an agreement with Lollipop Bank whereby the bank handles $6 million in collections a day and requires a $500,000 compensating balance. Puddle of Mudd is contemplating canceling the agreement and dividing its eastern region so that two other banks will handle its business. Banks Aand B will each handle $3 million of collections a day, and each requires a compensating balance of $300,000. Puddle of Mudd’s financial management expects that collections will be accelerated by one day if the eastern region is divided. Should the company proceed with the new system? What will be the annual net savings? Assume that the T-bill rate is 4 percent annually.