4. Henleigh Hill, CFO of HH Corp, Uses a decentralized company processing Center for cheque collection. she estimates that the total annual cost of collections is currently $300,000. Henleigh is considering switching to a centralized company processing center, but she is worried about the required increase in fixed costs use the following assumptions to determine the maximum fixed cost of the centralized company processing center that would make Henleigh indifferent between decentralized or centralized company processing center.

number of checks processed per year= 450,000

average face value of checks= $1000

collection float for centralized processing= 5 days

variable processing cost per check for centralized processing= 0.25 dollars

opportunity cost rate= 5%