Express Delivery Company $($EDC$)$ is considering outsourcing its Payroll Department to a payroll processing company

for an annual fee of $$220,000.$ An internally prepared report summarizes the Payroll Department's annual operating

costs as follows:

EDC currently rents overflow office space for $$36,000$ per year. If the company closes its Payroll Department, the

employees occupying the rented office space could be brought in$-$house and the lease agreement on the rented

space could be terminated with no penalty.

If the Payroll Department is outsourced the payroll clerks will not be retained; however, the supervisor would be

transferred to the company's Human Resource Management Department. As a result of this transfer, the company

would discontinue its efforts to hire a new Human Resource Manager for whom it expected to pay an annual salary

of $$56,000.$

The Payroll Department's equipment would be transferred to other departments within the company to replace

outdated equipment that would be recycled for zero salvage value.

Required:

What is the financial advantage $($disadvantage$)$ of outsourcing the Payroll Department?