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. What is the total opportunity cost for a month based on the firm's current practice?