What is the average daily cash balance

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Reference no: EM131187930

The Timberline firm expects a total cash need of $12,500 over the next 3 months. They have a beginning cash balance of $1,500, and cash is replenished when it hits zero. The fixed cost of selling securities to replenish cash balances is $3.50. The interest rate on marketable securities is 8% per annum. There is a constant rate of cash disbursement and no cash receipts during the month.

Based on the firm's current practice, what is the average daily cash balance (a month has 30 days)?

$50.00

$69.44

$94.44

$138.89

None of these.

Reference no: EM131187930

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