What is the average daily cash balance

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Reference no: EM13675505

Essay Question:

The Timberline firm expects a total cash need of $12,500 over the next three 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)?

Reference no: EM13675505

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