Problem:
The Timberline firm expects a total 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, how many times during the next 3 months will the cash balance be replenished?
A. 3.33 times
B. 4.42 times
C. 8.33 times
D. 13.35 times
E. None of the above.