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.